Recent Developments in Bitcoin Regulation
In the latest chess match between cryptocurrency advocates and regulatory watchdogs, Bitwise Asset Management has once again taken the stage, presenting their case to the U.S. Securities and Exchange Commission (SEC) in hopes of securing approval for a Bitcoin exchange-traded fund (ETF).
The Case for Increased Market Efficiency
Bitwise’s presentation, dated September 17, takes a deep dive into how the Bitcoin market has transformed over the past two years. One of the key highlights? The spot market has sharpened its efficiency.
Gone are the days of substantial price gaps across exchanges. Back in December 2017, average price deviations among the top ten exchanges were flirting with the 1% mark. Fast forward to today, and we’re looking at a breathtaking sub-0.1% deviation. That’s some impressive progress!
Building Institutional Trust
As if that weren’t enough, the financial infrastructure supporting Bitcoin is also seeing considerable growth. New institutional-grade custody services are not merely popping up but are being officially licensed, which is like getting a thumbs-up from the financial gods.
Furthermore, Bitcoin futures trading volumes on the Chicago Mercantile Exchange are booming like never before, hinting that the regulated futures market has finally hit its growth spurt. You could say things are getting serious in the world of Bitcoin!
Fake Volume – A 95% Crisis Turned Insight
If you’ve ever heard the phrase “fake it until you make it,” the crypto world took that way too literally, with claims that a staggering 95% of trading volume was fabricated. But fear not because the industry has been busy ironing out those wrinkles!
Data providers have been hard at work, ensuring that they can differentiate between real trades and digital smoke and mirrors. Post-research, some exchanges reported a jaw-dropping drop in volume by over 90%. Talk about a reality check!
The Road Ahead: SEC Approval? Maybe?
With all these improvements, Bitwise is crossing its fingers that the SEC’s concerns are as good as addressed. However, as SEC Chairman Jay Clayton put it, don’t hold your breath just yet; he reiterated that more regulation is required before Bitcoin is officially welcomed onto traditional exchanges.
The Bottom Line
As Bitwise continues to push for ETF approval, the cryptocurrency landscape is evolving at a breakneck speed. Whether this new era of efficiency and transparency will finally convince the SEC to lift the veil on Bitcoin trading remains to be seen.
