Stop dreaming! The SEC didn’t want to pass the ETF at all!

The ETF (Transactional Open Index Fund) is a complex concept that provides investors with a new type of investment channel that allows investors to obtain a portfolio that is usually only available to institutions with low cost. In 2003, once the first gold ETF was born, it triggered a wave of subscriptions around the world, and the trend of gold ushered in rapid development. Therefore, in the blockchain market, everyone is expecting the SEC to formally pass the blockchain asset ETF proposal with an “unclear” attitude, and then add some more to the Bitcoin market cap.

Does the blockchain market need an ETF?

The blockchain market is an extremely free market where people choose to trade according to their needs. But in addition to conventional choices, more and more people want to diversify their trading products. Of course, you can also choose Coinbase’s index fund, but it only targets 4 mainstream blockchain assets. This kind of “diversification” is better than nothing.

Some people say that the market value of the blockchain market is around $210 billion. According to the market value, only the assets between top10 and top20 are currently “qualified” to launch the corresponding index funds. But there is no such thing in the market. This is the case in the market. Institutional investors and ordinary investors have their own needs, waiting for the market to meet, so people hope to have more index funds.

In addition, in the SEC’s view, the blockchain asset market currently has a market value of hundreds of billions, and more and more excellent assets continue to emerge. Therefore, the growth potential and growth potential of the blockchain asset market are very large.

Since the current market does not seem to have enough index funds for everyone to choose, combined with market demand and SEC attitude, the market’s top priority is to meet demand, so now the entire blockchain market is waiting for the SEC to make a decision as soon as possible.

The adoption of ETF will bring “good” to the market?

Before the advent of the gold ETF, investors could only buy gold at a gold store or at a particular exchange. However, after the formal adoption of the gold ETF, the listed stock exchange, as long as you have a stock account, then you can buy gold on the stock exchange. This is why the price of gold will be “high-sounding” after the launch of the gold ETF. For the same reason, Bitcoin price is the same.

In traditional financial markets, for many ordinary investors, Wall Street only exists in news, reports or TV shows, and it is difficult for them to actually enter Wall Street. But the blockchain market offers a completely different choice. For most people, products like ETFs will be more open and convenient in the blockchain ecosystem.

Therefore, ETFs will give people more choices. For example, a young man in his 20s and 30s can use pensions as a hedge fund, because they will have to use hedge funds for 20 or 30 years. So for many people, ETFs have the characteristics of “at your fingertips” and ideally they can be purchased at any exchange.

Logically speaking, if the blockchain asset ETF can be approved and successfully listed, Bitcoin currency will enter the current “mainstream” market. As long as investors have registered US stock accounts, they can trade in the exchanges like other traditional funds. The currency fund.

For the blockchain market, there will be a “flying” change in the number of investment users. Perhaps there are only a few million trading users on the market, so after the blockchain asset ETF is passed, it may attract tens of millions or hundreds of millions of investors. To put it bluntly, the blockchain market will absorb more huge funds into the market.

Behind our “benefits” of blockchain asset ETFs, the SEC has its own concerns. That is why, since the Winklevoss brothers first proposed the ETF proposal in 2014, all ETFs have been “rejected” for four years.

Why does the SEC frequently play “Tai Chi”?

On September 21, a Bitcoin news was sent out. SEC Commissioner Brent J. Fields announced that it would postpone the announcement of whether to apply for the ETF through the Chicago BZX. The ETF application, which was eagerly awaited, was postponed again without any surprise after several appetites.

Although the SEC has not explained the reasons for the delay, everyone knows that the SEC’s concerns about ETFs have always existed. In the past few years, the reasons for the SEC’s rejection of the proposal were basically the same, and the main concern was the liquidity of the ETF.

The blockchain is born with the brand of “globalization”, which is a fact that no one can change. Objectively speaking, all other financial ETF proposals previously passed by the SEC can be fully regulated to prevent risks. However, for the moment, the rapid development of the blockchain market has further highlighted its global characteristics. Bitcoin does not have national attributes and cannot meet the basic requirements of the SEC for financial securities products. Therefore, the SEC controls the ETF. It can be difficult.

Therefore, in July, the SEC vetoed the ETF based on the Twin Exchanges proposed by the Winklevoss brothers. The SEC believes that the ETF proposed by Winklevoss does not have sufficient liquidity and that there is a “huge conflict of interest” in the use of exchange data, which may cause the market to be manipulated.

So some people think that the direct reason for the SEC to “play Tai Chi” again is that the SEC is worried that if the proposal is rejected directly, there will be a vote of the members, and then the blockchain asset ETF supporters in the committee such as Hester Peirce and Elad Roisman will have Time convinced the other three members to “green light.” Some netizens also believe that the SEC may need time to read more than 1400 comments submitted at the Open Forum for Soliciting Opinions before making a decision.

There is of course a possibility that the SEC is prepared to reject the ETF proposal, but it tries to get some of the proponents to retreat in this “half-dead” way. In this way, the SEC can reject the proposal and pretend to encourage capital formation. It can be said that, in fact, the SEC has closed the door to traditional markets and institutions, and it may not be willing to make the blockchain market a “fragrance” for people to invest.

The risk of blockchain asset ETFs is too “fuzzy”

Fran Strajnar, CEO of New Zealand blockchain investment firm Techemy, is involved in almost all aspects of blockchain asset generation.

In a conversation, Strajnar believes that the blockchain asset ETF will take at least a year to get approval. Because in his view: “At present, the organization has begun to build sound infrastructure and financial products, but it will take at least one year to complete.”

Strajnar continues to conclude that through research on ETF-related materials, he found that most ETFs violated financial regulation. He said: “Basically, ETF submitters must prove that these ETFs will not pose a quality risk to retail investors. The biggest problem at present is: qualitative what is the quality risk.”

However, unfortunately, many ETF proposals currently do not have the correct safeguards.

Strajnar said: “Although people think that the Bitcoin ETF is better than the Winklevoss brother’s ETF, it is not much different.” Strajnar also suggested that if the applicant wants to successfully pass the ETF review, they need to modify their proposal. Try to be compliant. Because “the SEC is not stupid, the SEC will always veto the proposal, until the stipulations in the proposed proposal, the SEC will consider approval.”

After a delay, there are different opinions.

For whatever reason, everyone wants to know what impact the SEC will have on the market.

Some people think that in the case of unclear official attitudes, those ETF fans want to have an officially recognized bitcoin ETF and hope that they will not be fully regulated by the SEC. So the current situation is that in the blockchain asset ecosystem, companies can establish their own ETF-related products without issuing stocks, and they are not under the jurisdiction of the SEC.

When many people believe that ETFs will be passed, professional analysts confirm that everyone’s enthusiasm for ETFs is too “crazy.” Michael Cohn, chief investment strategist at asset management firm Atlantis, believes:

“The blockchain community puts blockchain assets on the label of assets, but I don’t think the government currently agrees with this idea. Personally, I don’t want my clients to invest in blockchain assets in any way. .”

Digital currency analyst Joseph Young has quoted that the probability of a Bitcoin ETF being approved in 2018 is low. The reason why the SEC has been delayed is because the SEC needs to be responsible for approving the Bitcoin ETF, but it will not be rewarded for its success.

The SEC’s veto of the Winklevoss brother’s ETF application several times in four years is enough to show that the SEC’s attitude towards the blockchain ETF is very rigorous. For market and policy reasons, behind seemingly simple “pass” or “veto”, the SEC is also struggling and struggling.

Punch Line

For the refusal, Bitcoin Market seems to have become accustomed to it, and it is not surprising. Most financial analysts have previously believed that the ETF will not pass before 2019, but people are still willing to pay attention to any ETF-related news, and there is no sentiment in the market. This is the power of faith.