Connect with us

Bitcoin

Real Reason Why the SEC Rejects Bitcoin ETF

Published

on

Bitcoin ETF
READ LATER - DOWNLOAD THIS POST AS PDF

Only two days ago, August 23, the US SEC once again rejected all Bitcoin ETF requests, this time filed by Direxion and ProShares. Experts claim that the reason behind the rejection is fear of ETFs leading to fraud and market manipulation.

Winklevoss twins Bitcoin ETF proposal

About a month ago, the SEC stated that market manipulation is a real concern, which is why they rejected the Bitcoin ETF request filed by the Winklevoss twins. The twins managed to establish Bitcoin’s values through the use of their crypto exchange, Gemini, which is said to be strictly regulated.

However, this was not enough for the SEC, and the Commission stated that the markets can be relatively easy to manipulate, given the opportunity. Relying on one single exchange to dictate Bitcoin ETFs’ value would be exactly one such opportunity. Bitcoin ETF can potentially lead billions in new capital to the market, and this is too serious an amount, and represents a high risk to the economy, in general.

Prior to the refusal, the twins were convinced that their proposal actually had a good chance to be approved. This was additionally supported by Nasdaq’s involvement, which is the second-biggest stock market in the world. Nasdaq is involved in Gemini’s operations so that all tradings and the market itself would always remain authentic and completely transparent.

Direxion and ProShares made their own attempt

After the SEC rejected the request of the Winklevoss brothers, it received new proposals filed by Direxion and ProShares. Their proposals used CME and Cboe futures markets, which are also very strictly regulated, to try and establish their ETF’s value. However, the SEC found a flaw to this proposal as well and stated that, while CME and Cboe are, in fact, regulated markets, the BTC futures markets are not large enough to be used for establishing the value of ETFs.

According to the government enforcement defense and securities litigation attorney, Jake Chervinsky, the real reason for the SEC rejecting all of these ETFs is the risk of fraud and market manipulation. If the ETF’s design significantly lowers or even prevents these risks, then the SEC would approve it. Unfortunately, these ETFs are not designed in such a way.

He also said that the SEC was not satisfied with the two institutions’ efforts to only rely on the futures markets. This is due to the fact that the majority of BTC trading still goes down in unregulated exchanges and markets. This makes the BTC futures markets too small, as well as unable to provide enough information regarding the market participants’ identities.

In time, when the BTC futures market grows, and regulated financial institutions expand enough to create bigger futures markets, the SEC might change its mind regarding the ETFs backed by derivatives. However, for now, the SEC has no intention to approve marked-backed futures in the US. Even so, many believe that the ETFs filed by Cboe and VanEck have the highest chance to actually be approved in a relatively short period, which remains to be seen.

For the latest cryptocurrency news, join our Telegram!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Pexels

Altcoins

SonicX and Dash Could Challenge Facebook’s Libra for Global Payments Market Share

Published

on

SonicX
READ LATER - DOWNLOAD THIS POST AS PDF

When Satoshi Nakamoto unveiled Bitcoin to the world, the dream was always for Bitcoin to serve as a new universal currency.  It would be free from the bureaucracy of governments.  And free from the tyranny of the old-world financial cartels.  Although the dream hasn’t yet materialized, it comes closer and closer with each passing day.

One of the biggest roadblocks for Bitcoin has been scalability.  At a speed of approximately 7 transactions per second, Bitcoin lags behind other cryptocurrencies like Ripple and global payment processors like Visa.  Many expect the lightning network to have a positive impact on Bitcoin’s TPS but until that comes to fruition, mass adoption will likely need another significant development.

Libra Currency Announcement

One development that could help pave the way toward mass adoption is the launch of the Libra currency.  Libra is expected to go live during the first half of 2020 according to Facebook’s June announcement.  According to Facebook, Libra will make sending money online cheaper and faster.  It will also have a hand in improving access to financial services, especially for the unbanked.  Given Facebook’s global reach, including many third world countries, providing financial access to the unbanked could provide a huge spark to global economies.  Additionally, it could provide the growth spark that cryptocurrency needs.

Facebook’s most popular messenger, WhatsApp, has approximately 1.5 billion monthly users.  This application is…

Continue Reading

Bitcoin

The rise of the crypto casinos

Published

on

crypto casinos
READ LATER - DOWNLOAD THIS POST AS PDF

In the hyper-competitive world of online casinos, operators are always looking for ways to stand out from the crowd. The most usual methods include using distinctive branding, offering generous bonuses and making sure that they are on all of the major so-called affiliate sites where players can compare and contrast casinos’ different offerings.

But now a whole new generation of casinos are starting to emerge – ones whose key difference isn’t what and how you play, but more in how you pay.

The rise and rise of the cryptocurrency casino is seen by many as the next logical step in a world that is slowly but surely starting to accept that Bitcoin, Ethereum, Ripple, et al. are certainly here to stay.

Of course, it’s the first of these cryptocurrencies that has really grabbed the headlines and led the way with its meteoric performance in 2017 when it seemed like its $20,000 value was just the start of the story. Admittedly, this was short-lived and the value quickly fell back to a more sustainable level but, if it achieved one thing, it was to cement this exciting new kind of currency in the consciousness of the general public.

Why Bitcoin and online casinos are the perfect partners

In many ways, it’s the perfect partnership between Bitcoin and online casinos with multiple benefits for both.

The first of…

Continue Reading

Bitcoin

Investors Beware: Another Large Bitcoin Crash Might Be Coming

Published

on

Bitcoin crash
READ LATER - DOWNLOAD THIS POST AS PDF

The crypto prices have surged quite high in the last few months. Of course, their progress is nowhere near the one seen in 2017, but they appear to be getting there, one day at the time. However, things might not be as simple as that, and according to recent performance — it is more than possible that a major Bitcoin crash is incoming.

The fact is that cryptos saw a massive amount of growth in a very short period. Bitcoin itself more than doubled its price in only two months. Now, the rally is starting to crash in on itself, and the coin is already about $1,000 lower than last week. If such development does come to pass, a lot of people will experience quite large losses, although experienced investors might find some opportunities, and leverage in order to enhance their holdings’ long-term value.

For example, Bitcoin dominance is expected to crash very quickly, which will work in favor of quite a lot of altcoins. While this does not seem to be the best time to invest in BTC, altcoins are another story, and diversifying a portfolio now might end up being very profitable in days to come.

Bitcoin behavior mirrors the pre-bear market situation

The crash that analysts are predicting right now comes as a direct consequence of all the hype that has been building up in…

Continue Reading

Elite