[2017-03-17]Analyst: A Bitcoin ETF Stands No Chance Chance with SEC Committed to

[btcmylove]

Analyst: A Bitcoin ETF Stands No Chance Chance with SEC Committed to Protecting Fiat Currency
The Winklevoss twins never had a chance of getting the Securities and Exchange Commission (SEC) to approve their bitcoin ETF, according to one observer. Rafi Farber, writing in calvinayre.com, claims the SEC is more committed to protecting the interests of big banks, which are invested in paper currency, than in looking out for investors.

Michal Piwowar, who holds a Ph.D. in economics and heads the SEC, is typical of Ph.D. economists in being a “paper money fanatic,” according to Farber. These academics spend their time trying to understand human behavior using differential calculus, a tool that cannot accurately predict human behavior.

If calculus could predict human behavior, the Ph.D. economists would all know when to buy low and sell high and become millionaires, Farber noted.


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Who The SEC Protects

The mainstream media does a disservice in indicating that the SEC acts in the interest of protecting consumers. Instead, it protects big banks from competition and prosecution. One sign of proof is the number of “pump and dump” scams. A company with no employees can hide behind a shell under SEC rules and advertise to new investors.

Banks know enough not to invest in these scams, but “retail dumb money” does not.

Credit Suisse can issue double leverage, short-term VIX futures shares such as the TVIX which are highly volatile, Farber pointed out. The SEC doesn’t see this as something too dangerous to fix. The TVIX gets a green light because Credit Suisse issues it.

Triple-leveraged bear and bull ETFs that management giants issue are everywhere. A teenager can buy one.

Farber’s Culprit: Paper Money

The lynchpin in all of this, according to Farber, is paper money. Bitcoin, being decentralized, challenges the government’s control of money. A bitcoin ETF would have been a government sanction of a private competitor of the U.S. currency, an admission that government fiat currency is not needed.

The concept that government has to manage economies using paper money is the Holy of Holies among Ph.D. economists, particularly of a tax-supported school like Piwowar’s alma mater, Pennsylvania State University.

Farber sees a silver lining in the SEC’s action. If the SEC rejected a bitcoin ETF in 2013 during bitcoin’s previous peak, the rejection would have devastated bitcoin’s price. This time around, bitcoin’s price showed resiliency. While the price fell 20% for a short period, it recovered quickly.

The bitcoin price is rising since the supply of fiat currency is rising while that of bitcoin is stabilizing and will eventually stop growing. Price will then rise if demand remains constant.

In addition, bitcoin’s demand as a way to transfer wealth continues to increase as governments revert to capital controls and protectionism. One sign of this is the blockchain backlog has become so severe that miners are warring with one another about how to maintain the system. There are suggestions to split the currency in two. While the suggestion frightens some, it demonstrates a healthy demand.

Also read: Winklevoss twins aren’t giving up on their ETF

Bitcoin’s Battles Not Over

The government could impede bitcoin by prohibiting people to trade it. Farber expects this to happen at some point, most likely in China.

When inflation hits, look for governments to blame bitcoin. Just as gold owning was outlawed in 1933, desperate governments will do the same with cryptocurrency.
https://www.cryptocoinsnews.com/analyst-bitcoin-etf-stands-no-chance-chance-sec-committed-protecting-fiat-currency/

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1715166261

[shifu]

Thanks for share

[Quartx]

There are many countries where their ETF might be able to come into fruition. In Singapore, there are already heaps of fintech applications, being one of the best places in the world to do business too, I am sure they might find Singapore to be a suitable candidate if they do some research and they are in it for real.

[panju1]

Rafi Farber, writing in calvinayre.com, claims the SEC is more committed to protecting the interests of big banks, which are invested in paper currency, than in looking out for investors.

It is sad, but probably true. In a lot of investors, the regulators have a cozy relationship and are in bed with the regulated. And when something truly mind boggling comes around, they are closed to it.
The SEC might claim that a BTC-ETF is not good for common investors, but we can only guess what the true reason for rejecting the ETF might be.

[1Referee]

You don't have to be an analyst in order to know that ETF's don't stand a single chance, knowing the reasons why the Winklevoss ETF was rejected. I however find it funny that they are saying to do that in order to protect investors, but where were they at the time other (non Bitcoin) ETF's resulted in investors to lose millions and millions. Where was the SEC to protect them? SEC is a joke. But then again, Bitcoin doesn't need any ETF's to move forward. It would be nice of course as that would allow institutional parties to enter Bitcoin, but it's not a necessity.

[Iranus]

I'm not an advocate of the US government or anything, and I don't believe that their motives are legitimate or that their beliefs about Bitcoin are correct, but I don't think that this was their main reason for rejecting the Bitcoin ETF.

The reason that I think that is because if investors were putting money into Bitcoin and there was generally big money in Bitcoin, it would not be viewed as a serious currency and it would not necessarily result in Bitcoin being seen as a legitimate competitor to fiat currency but seen more as an investment and stable asset, like gold.

Generally I do believe that their main reasons for rejecting the ETF were the reasons that they mentioned.  These were their concerns about the use of Bitcoin with crime and how easy it is to commit fraud and they are (not necessarily rightfully) concerned about the safety of their investors.  To be fair, they are partially right as Bitcoin's pseudonymity and online security make it scammers' top choice for nearly anything, especially when there are naive newcomers who believe that they can suddenly get rich from Bitcoin.