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9. The Exchange represents that, while the Trust intends to conduct the majority of its trading in the OTC market on the OTC platforms that comprise the MVBTCO, the Trust also will maintain an internal proprietary database, which it will not share with anyone, of potential OTC bitcoin trading counterparties, including hedge funds, family offices, private wealth managers, and high-net-worth individuals. The Exchange further states that OTC bitcoin trading is typically private and not regularly reported, and that the Trust does not intend to report its OTC trading. What are commenters’ views on how the Trust’s unreported OTC trades may affect the calculation of the Trust’s NAV and the ability of market makers to engage in arbitrage?
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8. What are commenters’ views on each of the set of alternative means by which the Trust proposes to value its holdings in the event that the Sponsor determines that the MVBTCO, or another alternate pricing mechanism, has failed or is unavailable?
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7. What are commenters’ views on the statement in the Notice that, according to the Sponsor, the MVBTCO’s methodology decreases the influence on the MVBTCO of any particular OTC platform that diverges from the rest of the data points used by the MVBTCO, which reduces the possibility of an attempt to manipulate the price of bitcoin as reflected by the MVBTCO?
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6. What are commenters’ views on the Trust’s proposal to value its bitcoin holdings based on an index—the MVBTCO—that is calculated through a proprietary, non-public methodology that uses the privately reported bid/ask spreads of an unidentified set of U.S.-based market-makers in the OTC marketplace, which, the Exchange says, has no formal structure and no open-outcry meeting place? Is the use of a non-public proprietary index to value holdings based on OTC activity an appropriate means to calculate the NAV of an ETP? What are commenters’ views on whether determining NAV based on the index value at 4:00 p.m. E.T. might, or might not, create an opportunity for manipulation of the NAV or of the Shares?
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5. What are commenters’ views on whether and to what extent bitcoin futures markets generally, and current volume on those markets specifically, affect the susceptibility of bitcoin to manipulation? What are commenters’ views on whether and to what extent other listed bitcoin derivatives, and the current volume on the markets for those derivatives, affect the susceptibility of bitcoin to manipulation?
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4. What are commenters’ views, generally, on whether the proposed ETP would be susceptible to manipulation?
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3. The Exchange asserts that the dissemination of information on the Trust’s website, along with quotations for and last-sale prices of transactions in the Shares and the IIV and NAV of the Trust, will help to reduce the ability of market participants to manipulate the bitcoin market or the price of the Shares and that the Trust’s arbitrage mechanism will facilitate the correction of price discrepancies in bitcoin and the Shares. In addition, the Exchange asserts that demand from new, larger investors accessing bitcoin through investment in the Shares will broaden the investor base in bitcoin, which could further reduce the possibility of collusion among market participants to manipulate the bitcoin market. The Exchange further states that the exploitation of arbitrage opportunities by Authorized Participants and their clients and customers will tend to cause the public trading price to track NAV per Share closely over time. What are commenters’ views regarding these statements? For example, do commenters agree or disagree with the assertion that Authorized Participants and other market makers will be able to engage in arbitrage and to make efficient and liquid markets in the Shares at prices generally in line with the NAV?
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2. What are commenters’ views on the Sponsor’s assertion, described by the Exchange in the Notice, that “the OTC desks have a better measure of the market than any exchange-specific reference price, whether individually or indexed across multiple exchanges”? What are commenters’ views on the Exchange’s representation that, in the OTC markets, the dual elements of principal-to-principal trading combined with the large size at which trades are effected should effectively eliminate the ability of market participants to manipulate the market with small trades as may be the case on any individual exchange? What is the current typical number and volume of transactions on the OTC market? What are commenters’ views on whether the liquidity of the OTC bitcoin market, which would be used as the reference market for pricing the proposed ETP’s holdings, is sufficient for efficient bitcoin price discovery? What are commenters’ views on whether the liquidity of the OTC bitcoin market is sufficient to support efficient arbitrage between the price of the Shares and the spot price of bitcoin? What are the numbers of active traders, market makers, and other liquidity providers on the OTC bitcoin market? To what extent is trading in the OTC bitcoin market subject to regulation?
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The Commission asks that commenters address the sufficiency of the Exchange’s statements in support of the proposal, which are set forth in the Notice,32 in addition to any other comments they may wish to submit about the proposed rule change.
Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved.
In particular, the Commission seeks comment on the following:
1. What are commenters’ views of the Exchange’s assertions that bitcoin is arguably less susceptible to manipulation than other commodities that underlie ETPs; that the geographically diverse and continuous nature of bitcoin trading makes it difficult and prohibitively costly to manipulate the price of bitcoin; that trading on inside information regarding bitcoin is unlikely; that the fragmentation across bitcoin markets, the relatively slow speed of transactions, and the capital necessary to maintain a significant presence on each trading platform make manipulation of bitcoin prices through continuous trading activity unlikely; that manipulation of the price on any single venue would require manipulation of the global bitcoin price to be effective; that a substantial OTC bitcoin market provides liquidity and shockabsorbing capacity; that bitcoin’s “24/7/365 nature” provides constant arbitrage opportunities across all trading venues; and that it is unlikely that any one actor could obtain a dominant market share?
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  We've got a pulse on the EKG! |
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Golden Cross Update With the daily 200 MA @$8025 continuing to drop ~$45 a day and the 50 MA having bottomed out @$6720, simple extrapolation would the two crossing in another month or so, maybe mid to late Sept. No change from last month's forecast. Maybe we'll get a false start and a mini set of crossings like we did in 2015 before it takes off again. After that last golden cross in 2015, they didn't cross again for 2.5 years!  |
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Yawn. Still sideways. Meanwhile, a new batch of public comments to the SEC have been posted regarding Cboe et al ETF. https://www.sec.gov/comments/sr-cboebzx-2018-040/cboebzx2018040.htmThe Negative Nancies are starting to appear: In a world where making a daily living is hard enough, how can you in good conscience, allow a speculative/scam instrument like Bitcoin to exist let alone approve an ETF. Blockchain has its merits but Coins are nothing more than a digital scam which is robbing people of their hard earned money and enabling speculative fervor. You must crack down on this so called 'currency' and make stringent rules on its existence. Thank you for your consideration I strongly oppose allowing the listing of the Bitcoin ETF. Bitcoin is a pure speculation vehicle with no traditional value or commercial/industrial use. It has no fundamentals, is exceptionally volatile and is easily manipulated due to poor market liquidity and no market regulation. A CBOE listed ETF that is proposing to be a passive Bitcoin holding vehicle is nothing more than trying to get a broader pool of investors involved in something that would never be allowed for listing on a regulated stock exchange if it was a company. This proposal most likely exists at all to draw additional money into the Bitcoin "ecosystem" as it is commonly called, essentially transferring risk from current market participants to newcomers who otherwise would not know how to get involved or would be prohibited by regulation or governance ethics from doing so. Additionally, much of the purported size of Bitcoin is an illusion, with "market cap" as reported on private websites such as Coinmarketcap.com taking all coins ever in existence multiplied by an average of the last traded price in dollars. Volume is commonly reported as all Bitcoins traded in dollar value even if, as is the case, most of them did not trade against hard currency at all, instead trading against other cryptocurrencies or Tether, a purported 1:1: USD backed cryptocurrency that has been used to artificially pump the price and is more comparable to counterfeit money. [...snip (he goes on)...]This anti-ETF guy included supposed manipulation charts: https://www.sec.gov/comments/sr-cboebzx-2018-040/srcboebzx2018040-4190297-172697.pdfThis pro-ETF lady cries foul on SEC claims of price manipulation: https://www.sec.gov/comments/sr-cboebzx-2018-040/srcboebzx2018040-4185567-172649.pdfBack to hibernation. |
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CBOE RESPONDS: After Delay Is Announced, Sources Confirm Continued Bitcoin ETF Confidence https://theicojournal.com/cboe-responds-after-delay-is-announced-sources-confirm-continued-bitcoin-etf-confidence/“Expected and the markets are acting irrationally to the announcement. Every single submission like this has gotten a delay. Again, expected. Still expect approval. 99% expectation. Print it, but as always, don’t use my name.  ” “Our team expected this delay, almost to the hour, and has been an expectation in our planning process. We won’t say when we expect an approval, but there has been specific speculation that we actually agree with and have incorporated into our timeline. We are in no way surprised by this. Most importantly, we believe our submission is the strongest yet to be put in front of US regulators, and believe that strength will be rewarded.” “The four people I still talk to on the daily at the SEC are basically telling me this ‘it is going to get approved but we are going to make the markets understand that we dug really, really deep i.e. investor protection/transparency’. And that makes sense. The vast majority of the public still has no idea what ‘digital assets’ are or what it means. So when you do an approval like this, and the successive approvals that will follow in this asset class – think of the 3-5 year return number that will be associated with this market? And maybe that is the key to the Van Eck SolidX approval? It is set up as an accredited investor vehicle. That singular element is probably what gives so many of us a firm belief in its approval. And it is a stroke of genius by the Van Eck SolidX group.” If you knew an approval were imminent, and you had the means, wouldn't you strive to drive the price down as much as possible in the months preceding? What effect might an ETF approval have on Bitcoin dominance? Legitimize the entire asset class or single out Bitcoin? One coin to rule them all, one coin to find them,
One coin to bring them all and in the darkness bind them?It's a shame this arcane ETF approval process has basically throttled speculation, but it has done wonders for separating innovation from chaff. What might a post-ETF world look like? |
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Welp, still going sideways. 6 months and counting. Not until we're safely over $10k is Bitcoin trending up again. It would have to fall below $5k before we're trending down again. Long-term HODLers view, YMMV.  |
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