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Real Reason Why the SEC Rejects Bitcoin ETF

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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.

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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.

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Bitcoin

Is Bex500 an alternative to BitMEX?

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An all around review of Bex500

Bex500 is a young but rapid-growing exchange, less adversarial than BitMEX, but with higher leverage than Binance, Bex500 has enough strings to attract many crypto traders. 

Those dissatisfied with the old exchange, may find Bex500 exchange with a stable system with no manipulation or “overload”, pleasant UX, user-friendly tool kits, and around-clock customer service.

Bex500 says they are making crypto margin trading “easier” and giving you a better return. 

Can they really achieve that? We conduct a comprehensive review as below to see if it is a trustworthy exchange

Question 1. What features does Bex500 have?

Bex500 offers perpetual BTC futures as well as three other cryptos including ETH, XRP and LTC, all paired against USDT. You may find Bex500 doing a good job aggregating most important features traders need for a robust trading experience with better return.

-A fair trade with no overload

Many traders are familiar with “overload” problem, which disables placing orders in peak trading times. It is suspected to be insider manipulations by exchanges which can cost users entire portfolios.

Bex500, with its unmatched TPS (claimed to be over 10,000 orders per second), ensures that the trading…

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How Bitcoin Has Changed Online Gaming

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We always hear how Bitcoin is great for the financial industry, how it can remove the middleman and help you save money while you spend money. How it can provide fast transactions at any time to any place, even when you wish to send money to someone on the other side of the world.

While all of that is true, it is important to remember that Bitcoin’s impact does not end there. The coin has already changed countless other industries, but one of the first ones that have accepted it with open arms — and therefore one that was changed the most — is the online gaming industry.

Bitcoin’s impact on online gaming

The first thing to note here is that digital currencies have found their use in online gaming thanks to microtransactions. However, it goes far beyond simply purchasing an in-game item from another player. Bitcoin’s biggest impact, without a doubt, concerns online gambling, sports betting, and similar activities.

Bitcoin brings security and anonymity

Bitcoin casino has become one of the new most popular places for an online gambler to visit, and for numerous reasons. Bitcoin brought increased security — to the financial industry, as well as online games. This is important because security is crucial for anyone who enjoys online gambling. It…

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The Crucial Role of Cryptocurrencies & Blockchain in Modernising The Telco Industry

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Blockchain has caused quite a stir in recent years. In fact, there’s a school of thought that firmly believes the digital ledger technology will prove to be the 21st Century’s biggest innovation

There are a great many industries braced for the disruptive force of blockchain, and the sweeping benefits it can bring to telecommunications can’t be underestimated. 

A blockchain is a decentralised, distributed, public digital ledger that’s fundamentally used to record transactions online. Every transaction that takes place is recorded across an extensive array of computers in a way that ensures that any individual record within the chain can’t be tampered with or retroactively modified. 

Because of the virtually impregnable security associated with blockchain and the efficiency that comes with a fully decentralised ledger, there’s plenty of potential for the technology within the telco industry in particular – especially given the financial flexibility that comes with cryptocurrency transactions beyond borders. 

Let’s take a deeper look at the important role that both blockchain and its associated cryptocurrencies can play in modernising and securing the telco industry:

Unprecedented security

The arrival of blockchain is causing a stir at Deloitte. The professional services giant has contributed tens of thousands of words on blockchain within its ‘insights’ network, and there are…

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