The SEC recently rejected Vaneck’s bitcoin spot market ETF. The SEC cited as a reason for the rejection that there was no mechanism at the moment to prevent fraud and market manipulation. The SEC had previously approved bitcoin ETFs based on bitcoin’s derivatives markets, specifically futures.
Opposition
Peter Brandt, a long-time FX trader, tweeted that spot market bitcoin ETFs need to be opposed. He felt that any move by Wall street to convert Bitcoin into a vending machine asset needs to be opposed. He went on to say that the bitcoin’s value arises from its scarcity and difficulty in purchasing. He felt that its conversion into a spot market ETF would dilute that value.
Counter Opinions
The host of the podcast- ‘The Investor’, Preston Pysh, also discussed the issue. Pysh felt that SEC’s rejection helped the interests of hedge funds and adversely affected retail investors. Others felt that the SEC has allowed derivatives and only rejected bitcoin futures because futures can be easily manipulated. The head of the CFTC said that they could control silver prices by tamping down on them through futures. This has an anti-inflationary effect. The same could also be done with bitcoins. Just as with silver, with bitcoins too anti-inflationary effects can be brought to bear and the US dollar made more attractive and safer.
However, other crypto traders were pleased to note that the rejection by the SEC of the bitcoin spot ETF did not have any influence on its price. Traders felt that the bitcoin did not need a spot ETF. Traders feel that as long as the true bitcoiners keep on buying, selling and holding bitcoins, its value will remain.
