[2018-07-28] VanEck Responds to SEC’s Bitcoin ETF Concerns In New Letter

[BitcoinArsenal]

Money management firm VanEck has responded to the SEC’s concerns over bitcoin exchange-traded funds (bitcoin ETF) in a letter to the regulator made public on the agency’s website. Addressed to Dalia Blass, director of the SEC’s division of investment management, the letter tackles the five points of order from the SEC’s previous communication with the industry, namely: valuation, liquidity, custody, arbitrage, and potential manipulation.
Full article on CCN

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[gentlemand]

Full text there - https://www.sec.gov/divisions/investment/van-eck-associates-innovation-cryptocurrency.pdf

This proposal is futures based so in effect it doesn't touch Bitcoin anywhere along the line at all. A custodial one is a more erotic prospect for BTC fans.

I would guess something futures based has a higher chance of passing simply because it deals with nuts and bolts the SEC are already familiar with. Doesn't do much to address their doubts about manipulation though. It could be worse. We're seeing hints of that with prices moves around futures closing and opening.

[Betwrong]

I'm not sure about this, but I think we can't say the following about BTC yet:

“While one cannot rule out manipulation in the underlying spot market, we believe that, due to the diversified ownership and volume of trading, the market does not have major, structural vulnerabilities. Therefore, the Commission’s increased enforcement and regulatory actions can reduce the number of bad actors in a basically sound market.”

Being in the situation when the top 100 bitcoin addresses control 17.3 percent of all the issued currency can we talk about diversified ownership? I don't know, maybe we can, but I'd appreciate if someone could give me a more or less comprehensive answer.

[richardsNY]

Being in the situation when the top 100 bitcoin addresses control 17.3 percent of all the issued currency can we talk about diversified ownership? I don't know, maybe we can, but I'd appreciate if someone could give me a more or less comprehensive answer.

It depends on how you look at these addresses. If you look at the addresses in the way that they are controlled by a few parties, then it's not diversified ownership. If you look at these addresses in the way that these funds all belong to millions of users, then it could be seen as diversified ownership. Most of these addresses are from miners, exchanges, online wallet services, gambling sites, etc. But then again, I am of believe that when you aren't the sole owner of your private keys, you don't have any coins at all. It's personal for everyone where each opinion on these addresses is more or less truthful. It's up to the SEC to finally make up their mind.

[squatter]

Regarding the liquidity section, any idea how the BTC market compares to other markets? It's not clear from their response. The biggest thorn in the SEC's side is probably the prospects for manipulation.

This proposal is futures based so in effect it doesn't touch Bitcoin anywhere along the line at all. A custodial one is a more erotic prospect for BTC fans.

It's funny to me that bitcoiners like the idea so much. Putting P2P coins into a trust so people can buy/sell derivative securities? Haha!

I guess they've bought into the idea that "ETF=moon."

[gentlemand]

It's funny to me that bitcoiners like the idea so much. Putting P2P coins into a trust so people can buy/sell derivative securities? Haha!

Stuff of this nature is pretty inevitable as long as something worth money is traded for long enough in a flashy enough manner. And all most people want is a higher price and they're not too fussy about how it gets there.

[Betwrong]

Being in the situation when the top 100 bitcoin addresses control 17.3 percent of all the issued currency can we talk about diversified ownership? I don't know, maybe we can, but I'd appreciate if someone could give me a more or less comprehensive answer.

It depends on how you look at these addresses. If you look at the addresses in the way that they are controlled by a few parties, then it's not diversified ownership. If you look at these addresses in the way that these funds all belong to millions of users, then it could be seen as diversified ownership. Most of these addresses are from miners, exchanges, online wallet services, gambling sites, etc. But then again, I am of believe that when you aren't the sole owner of your private keys, you don't have any coins at all. It's personal for everyone where each opinion on these addresses is more or less truthful. It's up to the SEC to finally make up their mind.

Thanks for taking your time to explain! I was always thinking that most of those addresses belong to the so called "whales", and now I'm thinking, if that's not the case, how can we be sure that the whales exist at all? I personally would be very glad to know that there are no whales who can manipulate the market at their will, but unfortunately I think there are some around still. There will be less and less of them in the future, I'm sure, because BTC  will be distributed among millions of new adopters, but it might take several years for that to happen.