Author: Greg Cipolaro (Digital Asset Research co-founder)
Translation: Zoe Zhou
Source: Crypto Valley
- US Securities and Exchange Commission postpones three bitcoin ETF rulings again
- Jimmy Song: All those who are not optimistic about Bitcoin will eventually escape the "true incense" theory.
- Bitwise: There are only 10 Bitcoin exchanges with real trading volume
- Did Bitfinex kill the bull market? The US SEC may not approve the Bitcoin ETF this time.
- Bitcoin ETF approval and the final decision date, the market is not expected to be optimistic
- SEC rejects Wilshire Phoenixd's Bitcoin ETF application
Editor's note: The original title was "BTC ETFs and Pricing Make Great Progress at the Regulatory Level"
Since 2013, digital asset market participants have been trying to get U.S. regulators to approve the operation of BTC exchange-traded funds (ETFs). According to statistics, there are already 24 ETFs submitting proposals. Except for one of them, the rest of the applications have been rejected or withdrawn by the US Securities and Exchange Commission (SEC from Wilshire Phoenix and the United States BTC and the Treasury Investment Trust are still receiving SEC approval) .
From relying on different underlying assets (such as "physical" BTC and futures traded on regulated exchanges) to different underlying index methods, these ETFs have taken a unique approach to meeting the requirements of the US Securities and Exchange Commission for ETFs. Unfortunately, none of these combinations have met the requirements of regulators. Based on our interpretation of regulatory documents and public comments from members of the Securities and Exchange Commission, these requirements evolve as this asset class matures.
The industry has been working directly with regulators to help them understand the issues they are facing. Next, we will explore the history of the US Securities and Exchange Commission's rejection of ETFs, discuss the current status around the price of BTC, and how to promote dialogue between the two parties.
The importance of BTC ETF
ETFs have many advantages over traditional investment vehicles, such as open-end funds and closed-end funds. These advantages include liquidity, access to unique asset classes and investment strategies, portfolio diversification, tax benefits, margin capabilities and low costs. Specifically, the benefits of the BTC ETF include investor protection, tax returns and asset class access.
The BTC ETF will provide investors with the protection and disclosure of federal securities laws that cannot be provided by existing BTC ownership. In addition, the ETF also improves the transparency of the underlying asset ownership through NAV, intraday liquidity and simple tax reporting. Finally, the United States operates some of the most trusted and liquid markets in the world. As a world-renowned regulator, SEC approval may be seen as a signal to other financial regulators around the world.
Reasons the SEC has opposed so far: price manipulation and fraud
In the letter of refusal and public comment on the BTC ETF, the SEC and its members have consistently raised several issues. These concerns have focused on fraud and market manipulation in the underlying market. The SEC states that these issues can be resolved in two important steps: signing a monitoring agreement with a large, regulated market; or proving that the BTC market is free of fraud and manipulation, but so far no one has The applicant succeeded in doing this.
"Retail investors are seeing prices that they should rely on, not manipulated prices; not their own, but manipulated prices."
Next steps: lag relationship
In its notice against the Bitwise BTC ETF Trust, the SEC raised a new issue-the relationship between the prices of "real" trading volumes in digital asset exchanges and those that currently do not pass the censorship criteria, i.e. "leading- "Lagging" relationship. As stated in the denial:
"… I just believe that there is a problem with the reported volume and cannot replace data-driven analysis, that is, how other market participants adjust their prices in response to the prices of other platforms. Even if they agree that these platforms dominate, the transaction volume is not all false. of."
Price discovery is an important element of financial markets and has become crucial in the global fragmented BTC trading. A lead-lag study may help determine whether the BTC market can withstand price manipulation and which digital asset exchanges have real economic substance in their market activities, bringing the market closer to a market that can be trusted by regulators and investors Reliable BTC price.
Lead-lag research is ongoing. In the coming months, regulators and market participants will have a clearer understanding of whether premises engaged in suspicious activity will have a tangible impact on prices; if they do not, this will be for creators of ETFs, products and indices Very promising.
In any case, lead-lag analysis will help clarify the current market structure of this asset class and further discuss with the asset management industry, regulators, and crypto native investors in the US and globally.
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Article Source: Bitcoin Magazine