Posted on

Most Respondents File Negative Comments for SEC’s Review of VanEck/SolidX Bitcoin ETF

Multiple respondents have filed comments with the U.S. SEC on the latest proposed rule change for the VanEck/SolidX Bitcoin ETF.

Multiple respondents have filed comments with the United States Securities and Exchange Commission (SEC) on the latest proposed rule change for the VanEck/SolidX Bitcoin (BTC) exchange-traded fund (ETF). Comments to date were submitted between Feb. 13 and March 12.

As reported, CBOE’s BZX Equity Exchange — the exchange that would prospectively list the Bitcoin ETF — had temporarily withdrawn its application for a rule change on the ETF in January, citing the negative impact of the U.S. government shutdown on the SEC’s operations. CBOE then resubmitted the application for the SEC’s consideration at the end of the month.

On Feb. 19, the SEC announced that it would shortly be commencing the formal countdown period to approval or disapproval of the product, soliciting feedback from the public.

Among the seven comments filed thus far, six strongly urge the regulator not to approve the VanEck/SolidX proposal.

The sole response that affirms the positive value of the Bitcoin ETF approval is from respondent Sami Santos on March 12, who engages with the SEC’s previously given rationale for disapproving other ETF proposals:

“[Disapproval of] an ETF because of manipulation and […] the protection of investors is contradictory, because without an investment fund the investor is susceptible to buy bitcoins in deregulated exchanges and lose their investments.”

Noting that VanEck “offers insurance to cover possible losses,” Santos argues that ETF approval would create greater market security in providing more “liquidity, transparency and safe custody of assets that will have credibility for large investors.”

The lengthiest negative comment — from respondent Sam Ahn on Feb. 13 — focuses on Bitcoin’s lack of intrinsic value. Ahn accuses the ETF applicants and the 2008 Bitcoin white paper itself of “grand[ly] exaggerat[ing]” the mathematical complexity involved in Bitcoin mining. The applicants’ wording, he claims, “works like a moat around the castle of bitcoin mining, keeping us away from the reality of bitcoins.”

Other, more concise comments — echoing Ahn in part — focus on Bitcoin’s alleged lack of value as a financial product, its volatility and market manipulation “by the very few.”  One respondent, D. Barnwell, does provide an argument that proposes:

“I would ask the SEC […] to take a ‘watch and wait approach’ […] [t]he true game changer is the underlying technology Blockchain, not the cryptocurrency. And to make inroads into this industry-changing technology, one does not need to have a financial product based on the cryptocurrency.”

As previously reported, SEC chairman Jay Clayton has recently stated that there “may be a case where a Bitcoin ETF could satisfy our rules.”  He suggested the technology is “demonstrating significant promise in the places where it’s consistent with our approach to capital raising in the past.”

As Cointelegraph reported yesterday, the SEC is also soliciting industry input as it potentially reconsiders existing custody rules in specific cases of digital asset trading and settlement.

Posted on

VanEck’s Bitcoin (BTC) ETF Receives Scathing Comments, What’s The Deal?

Bitcoin Has No “Intrinsic Value”: American Investors Weigh In

Since a Bitcoin exchange-traded fund (ETF) was proposed in the U.S. markets, pundits have lauded it as the single thing that could bring the cryptocurrency market from “immature” to “mature.” Others have also touted such a vehicle as the rocketship that would bring BTC to the moon, so to speak.

Yet, members of the non-crypto public aren’t too sold on the entire idea. Per a list of comments posted on the U.S. Securities and Exchange Commission’s (SEC) webpage, specifically in regards to VanEck, SolidX, and the CBOE’s rule change, most are skeptical of what value cryptocurrency provides.

Sam Ahn of Hana Trading released a six-page, nine-point tear down of Bitcoin and the proposed ETF product, which would open the floodgates to BTC. While Ahn’s points were drawn-out, a clear theme of anti-mining, Satoshi Nakamoto cynicism, and “BTC doesn’t have intrinsic value” was apparent. The investor remarked that not only is Satoshi’s magnum opus hard for him to process, but that the cryptocurrency isn’t like gold as in “a string of 64-digits, with about 17 leading zeroes” (hash) cannot be likened to a physical item used in electronics, jewelry, and as a value store.

While many cryptocurrency diehards would deem Ahn’s comments moot, this was just the tip of the iceberg. Another respondent, Dina Pinto, remarked that she believes that BTC doesn’t deserve a “serious product,” as she sees the nascent market surrounding the digital asset as “volatile and manipulated by the very few [that use it].” Pinto adds that the leading crypto has “no real use case.”

Another commenter, one Sarah Malone of unknown affiliation, echoed the aforementioned comments to a tee, explaining that there is no value in BTC becoming a tradable financial product, let alone a medium of exchange.

Finally, one other played the “blockchain not Bitcoin” card, remarking that cryptocurrencies lack viability in many’s day-to-day, while ledgers hold immense value.

What all the aforementioned critics seem to be forgetting is Bitcoin’s value proposition in nations stricken with capital controls, hyperinflation, authoritarianism, among other societal shortcomings. This, of course, is because they are viewing BTC from the lens of an American citizen, many of which aren’t (currently) subject to irresponsible government and fiscal planners.

But in the end, the opinions of U.S. citizens is what is important in this case, as the product will be accessible to some of those stakeholders .

The Silver Lining

Yet, there was a silver lining. One user, going by Sami Santos, published an eight-point comment on March 12th that outlined the merits of Bitcoin, and why it needs a fund tracking it. Santos stuck to the normal Bitcoin advocate script, explaining that it is fast, cost-effective, unconfiscatable, and private (not exactly, but it’s pseudonymous).

The investor went on to explain that blockchain can mitigate corruption and money laundering, Bitcoin can be a “weapon” against financial inequity and inflation, and as a medium to bolster innovation of technologies.

In this case, Santos was Bitcoin’s sole knight in the crusade for an ETF product, which would entirely legitimize this asset. But will the SEC listen to him, or those who were a tad sardonic?

Photo by Anna Popović on Unsplash

The post VanEck’s Bitcoin (BTC) ETF Receives Scathing Comments, What’s The Deal? appeared first on Ethereum World News.

Posted on

SEC Chairman Highlights Investor Protection in Regard to Bitcoin ETF

United States SEC Chairman Jay Clayton said that he is still concerned about the potential for manipulation in the crypto space.

United States Securities and Exchanges Commission (SEC) Chairman Jay Clayton is still concerned about investor protection when it comes to the commission approving a Bitcoin (BTC) Exchange-Traded Fund (ETF). The SEC chairman spoke about crypto in an interview with FOX Business on March 14.

In the interview, Clayton claimed to be neutral toward digital currencies, saying that he is not a spokesperson against the asset. The SEC chairman explained that he is concerned with the potential for manipulation associated with the space, and wants to guarantee investor protection:

“What I’m concerned about at the moment is if it can be reasonably demonstrated that the underlying trading is generally not manipulated, it’s happening on reliable venues with good rules and that custody is something we can feel comfortable about.”

While Clayton declined to comment on any specific Bitcoin ETF application, he still noted that there “may be a case where a Bitcoin ETF could satisfy our rules.” The chairman elaborated:

“I think this technology has and is already demonstrating pretty significant promise, but it’s demonstrating significant promise in the places where it’s consistent with our approach to capital raising in the past.”

Recently, the SEC announced it will soon start the countdown period to approve or disapprove the VanEck/SolidX Bitcoin ETF. After withdrawing the ETF application due to the U.S. government shutdown in late January, the Chicago Board Options Exchange (CBOE) re-submitted the application a week later.

Earlier this week, Jay Clayton confirmed his previous statement that Ethereum (ETH) and similar cryptocurrencies are not securities under U.S. law. However, Clayton stipulated that he meant that a digital asset’s definition as a security can change over time.

Posted on

New Blockchain ETF Co-Operator Elwood Plans Fresh Crypto Investment Options

Elwood Asset Management could offer exposure to cryptocurrencies such as Bitcoin and Ethereum.

United Kingdom-based asset management company Elwood Asset Management is looking to increase its cryptocurrency offerings after co-launching a blockchain exchange-traded fund (ETF), Bloomberg reported on March 12.

Elwood, which is owned by billionaire Brevan Howard creator Alan Howard, partnered with Invesco to bring a blockchain ETF to market this week.

Now, the company told reporters that it is already eyeing what else it could offer institutional investors eager to gain exposure to the cryptocurrency arena.

“The only way for institutions to get meaningful exposure to digital assets has been to buy Bitcoin, but many are reluctant or unable to buy Bitcoin – and for good reason,’’ CEO Bin Ren commented to Bloomberg, adding:

“An ETF gives a highly liquid and regulated way to gain exposure. This is the right point to start.’’

Ren did not mention specific products or services Elwood could offer.

“Elwood also plans to develop investments tied to the trading of digital assets, and may eventually offer exposure to cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH),” Bloomberg summarized.

Cryptocurrency investment products continue to gain both uptake and publicity, a trend which is contrasted by the still patchwork regulatory climate, which makes serving large numbers of clients vary in difficulty depending on jurisdiction.

As Cointelegraph reported, both the U.K. and United States currently present uncertain environments for operators.

London has eyed banning certain cryptocurrency-related trading instruments, while in the U.S., regulatory conformity has led to the repeated delay of Bakkt, a major institutional trading platform many hope will dramatically increase the industry’s public profile.

Posted on

Investment Firm Invesco Launches Blockchain ETF on London Stock Exchange

United Kingdom-based investment management company Invesco is launching a exchange-traded fund on the London Stock Exchange.

United Kingdom-based investment management company Invesco is launching a blockchain exchange-traded fund (ETF) on the London Stock Exchange (LSEG) today, March 11, financial newspaper Financial Times reports on March 9.

Per the article, the Invesco Elwood Global Blockchain ETF will initially be targeting 48 companies involved with blockchain technology. The firms were reportedly selected through a proprietary scoring system developed by crypto investment boutique Elwood Asset Management.

The article cites Apple, chip manufacturer Intel, graphics processing units manufacturer Advanced Micro Devices, mining hardware manufacturer Taiwan Semiconductor Manufacturing and United States exchange supporting Bitcoin futures CME Group as examples of companies included in the ETF.

Financial Times also points out that blockchain is not synonymous with decentralized cryptocurrencies, citing the JPM Coin, the stablecoin announced by JPMorgan Chase in February.

As Cointelegraph reported last month, U.S.-based Investment management firm AdvisorShares and investments advisory company Sabretooth Advisors announced they will jointly launch an exchange-traded fund that tracks tech companies, including those involved with blockchain and cloud computing.

Also, at the end of January, the Chicago Board Options Exchange, investment company VanEck and financial services firm SolidX re-applied with the U.S. Securities and Exchange Commission (SEC) for a rule change to list a Bitcoin (BTC) ETF.

Posted on

Nasdaq-Powered EU Digital Exchange DX Adds Tokenized ETFs

Nasdaq-powered digital trading platform DX.Exchange has announced the addition of tokenized ETFs, including SPY and QQQ, to its services.

Estonia-based digital trading platform DX.Exchange has added tokenized Exchange-Traded Funds (ETFs) to its services, according to press release shared with Cointelegraph on March 6.

The move involves the tokenization of popular ETFs, such as SPY, which represents the S&P 500, and QQQ, which backs the Nasdaq Composite at a 1:1 ratio. UWT (crude oil) and UDOW are among other ETFs offered on the platform. The ETFs offered can now be purchased both for cryptocurrencies and fiat during trading hours as well as after-hours.

According to the press release, the introduction of tokenized ETFs on DX.Exchange complies both with the latest guidelines issued by the European Securities and Markets Authority and with the EU Markets in Financial Instruments Directive II.

The chief operating officer of DX.Exchange, Amedeo Moscato, stated that he believes that the latest move by the EU-regulated company opens the world of popular financial assets to crypto holders. His statement reads:

“As of today, there’s over 130 Billion USD worth of Crypto that can now be invested in Digital Stocks and ETFs. Crypto investors who wished to hedge part of their crypto portfolio had only USD stable coins or limited options. Now they can invest in real world assets on the blockchain.”

DX.Exchange states that adding ETF trading to the platform will attract investors seeking to benefit from a lower-cost venue for executing their trades. Moreover, the decision will reportedly allow smaller retail investors or investors from developing countries to enter the market.

DX.Exchange first appeared as a concept in May last year and was launched in January of this year. The company uses Nasdaq’s Financial Information Exchange protocol to deliver its products.

As Cointelegraph wrote, the company initially proposed that crypto holders purchase tokens backed by stocks in various major companies, including Amazon, Baidu, Apple, Facebook, Google, Intel, Microsoft, Netflix, Nvidia and Tesla.

The trading at the Estonian exchange is currently only available for traders in the European Union. However, the company plans to make trading available to United States-based customers in 2019, according to a tweet from its co-founder and CEO in early January.

Posted on

WSJ: Bitcoin Trading at Strong Correlation with Gold as Traditional Investors Step In

A Wall Street Journal has suggested that Bitcoin’s correlation with “traditional” assets markets has been high in recent days.

A Wall Street Journal (WSJ) article published today, Dec. 28, suggests that Bitcoin (BTC)’s correlation with traditional assets markets has been high in recent days.

Citing data from research firm Excalibur Pro Inc., the WSJ states that the top cryptocurrency has traded at a 0.84 correlation to gold over the past five days, where -1 indicates complete inversion and +1 perfect correlation. Moreover, Bitcoin has traded at a 0.77 correlation to the Chicago Board of Options Exchange’s Volatility index (VIX), a benchmark index for the United States equity market volatility.

While the WSJ frames the strong correlation between traditional markets and what the article dubs as the rebellious first cryptocurrency, Bitcoin, as something of an unexpected twist of fate, the article also offers several explanations as to why the pattern may have formed.

The first is the reported influx of institutional money into the crypto space, with the WSJ citing the growth of Grayscale Investments’ over-the-counter exchange-traded fund (ETF), the Bitcoin Investment Trust, as a prime example.

As per the article, the trust saw $51 million in assets under management (AUM) during its first year (2013). By the end of 2017, in the midst of the crypto market bull run, AUM had surged to around  $3.5 billion. As of recently — due to the so-called “crypto winter” — the trust reportedly retains about $900 million AUM.

Another factor proffered is venture capital (VC) investment. The WSJ reports that whereas in 2013, VC investment in Bitcoin and the blockchain sector was at around $96 million, this grew to $500 million in 2016 and to over $2 billion in all-time VC crypto investment through the end of 2017. The WSJ gives no fresh data for 2018.

As the article notes, a pull factor for traditional capital into crypto is the building of trading services and infrastructure with high regulatory compliance; the advent of crypto futures trading, and attempts to gain broad acceptance for crypto-based ETFs.

As reported, the crypto space continues to undergo far-ranging transformation; major developments on the horizon include the launch of the Bakkt Bitcoin futures exchange from Intercontinental Exchange, the launch of investment giant Fidelity’s digital assets business, and the continued influx of stalwart investors such as Yale, Harvard and Stanford Universities.

Posted on

Blockchain Payments’ Mass Adoption Is 3-5 Years Away, Says BitPay CEO

Stephen Pair, the CEO of BitPay, declared that speculation is a substantial Bitcoin price driver, while “actual utility” is not.

The CEO of crypto merchant platform BitPay Stephen Pair stated that speculation on future adoption drives Bitcoin’s (BTC) price more than “actual utility,” in an interview on CNBC Dec. 13.

Speaking on the reasons behind Bitcoin’s current value, compared to its historic price highs, Pair told reporters:

“A very big component of the [Bitcoin’s] price is certainly speculation. It’s investors that are speculating on the future usage and adoption of this technology. I’m sure a small component of that price is the actual utility.”

When asked about a Bitcoin ETF’s potential to stimulate a price rally, Pair argued that “not just ETF adoption or ETF launches” could be catalysts for price movement, but that “adoption will push the prices higher,” adding optimistically:

“I do think we’ll see those kinds of prices at some point in the future, if history is any guide.”

Answering a question about blockchain-based currencies’ use in daily transactions, the BitPay CEO told CNBC that he expects such adoption to occur on a mass scale in under half a decade, stating that:

“I used to say 10 years, but now I think it’s more like 3-5 years until you can go into a restaurant, a retail establishment, and just everybody’s going to expect that that store will be able to accept a blockchain payment.”

Pair then further noted that he was not just referring to “Bitcoin or the various tokens that we see today [but] also about issuing dollars on a blockchain or euros on a blockchain.”

According to Hester Peirce, a commissioner for the United States Securities and Exchange Commission (SEC), the approval of a Bitcoin ETF is not necessarily close at hand. As Cointelegraph recently reported earlier this month, Peirce said that an approval “could be 20 years from now” or “tomorrow,” urging the crypto community to not “ hold [its] breath.”

A study published by the Cambridge Centre for Alternative Finance this week stated that the number of verified cryptocurrency users nearly doubled this year. A Bloomberg analysis of the study claims that the increase in crypto’s user base, despite prices declining, “could signal that an eventual recovery could be coming.”

Posted on

US Congressman Offers to Fund Mexican Border Wall Using Blockchain, ‘Wall Coins’

U.S. Rep. Warren Davidson suggests building a border wall using blockchain and “wall coins.”

Ohio Republican Congressman Warren Davidson suggested raising money to build a wall on the border with Mexico using blockchain, in an interview on NPR Dec. 12.

Davidson, who is known for his pro-crypto initiatives, spoke on NPR’s Morning Edition with host Steve Inskeep about the the United States president’s recent threat to shut down the government if Congress refuses to pay for a border wall.

Commenting on the matter, Davidson said he had offered a “modest compromise” in the form of his initiative, dubbed “Buy a Brick, Build a Wall,” that would accept public donations for the wall’s construction.

Clarifying how he saw a wall donation program working, Davidson invoked blockchain and “wall coins,” telling reporters Wednesday:

“You could do it with a sort of, like, crowdfunding site. Or you could even do a blockchain, and you could have wall coins. But you could raise the money. And frankly, if we get it right at the Treasury, you could even accept Mexican pesos.”

Davidson did not specify whether he had yet proposed his blockchain-based wall funding concept in any official capacity.

Davidson is well-known for pushing crypto-related legislation. He has repeatedly stated that Initial Coin Offerings (ICOs) need “light touch” regulation, planning to introduce a bill that would allow ICOs to “sidestep” the country’s securities law. Moreover, this fall the Ohio Rep. hosted a “crypto roundtable,” attended by over 45 representatives from major Wall Street firms and the crypto entrepreneurs and dedicated to the issues around regulating crypto.

Most recently, Davidson revealed his plans to introduce a draft bill that offers to clearly regulate cryptocurrencies and ICOs. Among other things, the bill will recommend creating an asset class for cryptocurrencies and digital assets that would prevent them from being classified as securities.

In November, Ohio reportedly became the first state to accept tax payments in Bitcoin (BTC) from businesses, with plans to accept payments from individual filers in the future.

Posted on

‘Don’t Hold Your Breath,’ Waiting for Bitcoin ETF Says SEC ‘Crypto Mom’

U.S. SEC Commissioner Hester Peirce, dubbed “Crypto Mom” for her pro-crypto stance, said the future of a Bitcoin ETF is still uncertain.

A commissioner of the United States Securities and Exchange Commission (SEC) said ‘not to hold your breath’ waiting for a Bitcoin exchange-traded fund (ETF) at the Digital Asset Investment Forum held in Washington D.C. Dec. 5.

Hester Peirce, dubbed “Crypto Mom” by the community for her dissent with the SEC’s decision to reject a Bitcoin ETF proposed by Cameron and Tyler Winklevoss, said that a crypto or Bitcoin ETF is “definitely possible,” but it could be years away:

“Definitely possible could be 20 years from now or it could be tomorrow. Don’t hold your breath. The SEC took a long time to [establish] Finhub. It might take even longer to approve an exchange traded product.”

According to Pierce, she is also trying to convince her colleagues “to have a bit more of an open mind” when it comes to crypto adoption, but it might take a long time.

Regarding the possibility of Bitcoin institutionalization, Peirce said that the SEC sees a lot of institutional and retail interest and will interact with it in many ways. She further added:

“I think we need to encourage institutionalization in crypto space. That’s not what the people in the space want, but I think there are institutional folks who want to be in this space […] And the best way that we can offer retail investors to get into this space is through a place that’s more institutionalized.”

When asked about recent SEC enforcements, “Crypto Mom” said that people have to comply with the law, but the government is obliged to figure out whether the regulation is preventing people from realizing new or innovative ideas.

“I want to make sure that the doors to innovation are open wide enough, and they’re not too constrained by regulation,” she concluded.

In a recent interview SEC Chairman Jay Clayton refrained from providing any specific time frame for a Bitcoin ETF, but instead reiterated the SEC’s stance. “I’m not going to comment on timing or anything like that, but we’ve been clear on some of the issues that are of concern to us,” he told CNBC.