SEC’s ETF Notice Strengthens Bitcoin Market Position
Most recent notifications by the US Securities and Exchange Commission (SEC) about crypto-based ETFs had negative effects on the market. However, its latest notice in which the SEC turned the table to ask the public for comments on a pending Bitcoin ETF application, seems to have achieved the opposite.
Though not much of a gain yet, the Sept. 20 notice sure shows that the SEC’s long list of questions to the public regarding claims in the Van Eck SolidX ETF application seems to have bolstered market confidence. The price of Bitcoin gained strength to its previous $6500 range as held four days earlier.
The comments sought are not new but they are crucial to ensure the public participated in contributing new perspectives to whatever position the Commission chooses to take. The information crowdsourcing process will widen the regulator’s scope as its final decision is made.
One of their 18-point areas of interest includes seeking public comment on the veracity of the assertion by the Exchange that
“…bitcoin is arguably less susceptible to manipulation than other commodities that underlie exchange-traded products (“ETPs”) because there may be inside information relating to the supply of the physical commodity (such as the discovery of new sources of supply or significant disruptions at mining facilities that supply the commodity).”
Also, they want to know that commenters agree with the Exchange’s representation that
“the Sponsor estimates that the U.S. dollar OTC bitcoin trading volume globally represents on average approximately 50% of the trading volume of bitcoin traded globally in U.S. dollars on U.S.-dollar-denominated bitcoin exchanges” or if the volume of U.S. dollar trading of bitcoin—which excludes bitcoin trading against other sovereign currencies or digital assets— is a meaningful or appropriate measure of bitcoin market volume.
The Exchange had made several claims for its application including that “manipulation of the price on any single venue would require manipulation of the global bitcoin price in order to be effective; that a substantial OTC market provides liquidity and shock-absorbing 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.
A SEC decision on the ETF earlier expected on Sept.30 may not be likely.