SEC Formally Accepts BlackRock Spot Bitcoin ETF Application for Review
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For example, is there a standard saying that the thing invested in must being legal? (No ETF based on illegal crack cocaine manufacturing, nor a fund based on illegal human-trafficking?)
Is it OK if the thing is imaginary, but everyone just pretends it has value? (Even if Gold is sometimes treated as imaginary convenience, at least it's based on a physical commodity with industrial application.) (Edit: Other than fiat currencies backed by states.)
No, not even the SEC & that's the cause of major court cases currently.
In normal security offerings, there's disclosures coming from the issuing company about financials/profitability etc but btc/eth are peer to peer networks so there's no-one in the middle to do these things & it is very different to normal securities.
That's the spin of all the PR the crypto exchanges have put out.
However, when it's time to put their money where their mouths are, they don't mention that there's no specific standards (because there is - the Howey Test).
Coinbase, for example, has been very loud about this. "We're desperately asking the SEC to help us do this right and they won't!"
Except their lawsuit says that they absolutely know how to "do this right", but...
> for many tokens, registering is not possible due to effort involved, or not economically viable.
i.e. Coinbase doesn't like the cost of having to register securities for the shitcoin du jour - there's no money to be made.
But the SEC isn't obligated to make a profitable business model for Coinbase.
Just because the SEC says something doesn’t mean it’s true.
As it is, the SEC has been implementing the Howey test as a result of that precedent.
Now, you can certainly argue that the Howey test is flawed or incomplete or... but that's separate to arguing that the SEC is misapplying the test.
It’s like saying what age can you legally smoke? OK there’s a legal age for smoking and cigarettes aren’t banned. Then you’re asking what age can you take illegal drugs? You can’t, they’re illegal.
ETFs usually consist of legal equities, bonds, currencies, real estate, commodities.
Yes it's okay. When people pretend something imaginary has a value then it has a value. That's how money, bonds, deeds, loans, contracts, equity, etc work.
Every few years I hear about a bitcoin ETF and it seems like even worse of a scam than holding cryptocurrency directly.
Clearly I’m too dumb (or too smart?) to understand how an ETF can tie itself to the value of bitcoin without also including a freely available redemption mechanism. Does it? If the value of my shares is equal to 1BTC (or whatever other cash out threshold), will they send Bitcoin to an address I specify? Is the ETF fully backed by bitcoin in a publicly auditable fashion?
These APs are chosen carefully, and have the express job of creating liquidity. They make their money on arbitrage, thus keeping the ETF price closely matched to that of the underlying.
> An investment in Shares is: Backed by bitcoin held by the Bitcoin Custodian on behalf of the Trust.
> Baskets may be created or redeemed only by Authorized Participants. Each Authorized Participant must be a registered broker-dealer, a participant in DTC, have entered into an agreement with the Sponsor and the Trustee (the “Authorized Participant Agreement”) and be in a position to transfer bitcoin to, and take delivery of bitcoin from, the Bitcoin Custodian through one or more accounts. The Authorized Participant Agreement provides the procedures for the creation and redemption of Baskets and for the delivery of bitcoin in connection with such creations or redemptions. A list of the current Authorized Participants can be obtained from the Trustee or the Sponsor.
This is all very standard and no more or less of a scam than other ETFs.
In the case of the BlackRock ETF it’s in the application. “Baskets may be created or redeemed only by Authorized Participants who pay BlackRock Investments, LLC”.
No you can’t personally physically redeem the Bitcoin yourself. That’s not the purpose and use of this ETF.
https://www.investor.gov/introduction-investing/investing-ba...
I think there's no buying X involved with an index ETF over X, in general, and I believe they are talking about an index etf here. (Of course, it still is some sort of gamble to trade in an index ETF.)
Custody is a spectrum, self custody is more towards cyber punk than white collar. People clearly want these assets and I predict the Bitcoin etf, when finally launched, will have the largest opening volume of any etf ever.
Advocating for dumb policies isn't a crime.
>political brib... Sorry, campaign funds.
In other words... they specifically did it in a legal way?
Sorry, that title still belongs to the US Dollar.