The Bitcoin ETF That Will Never Be
Next Thursday, August 23rd, will be another interesting day for the crypto world. SEC is expected to give an answer to another ETF proposal, this time by a company called Pro Shares. The wide consensus among analysts is that it will either reject it, or postpone it, just like it did with the VanEck/SolidX proposal, a few weeks ago.
Crypto markets seems to be very sensitive to this type of news lately, which kinda makes me wonder.
So, if SEC rejects an institutional vehicle for managing Bitcoin, the market goes down. Allegedly, when SEC will approve a Bitcoin ETF, a new bull run will start. In all honesty, this is very contradictory to me. Because it looks like the decentralized money, the globally distributed ledger, is now dependent on a centralized vehicle.
And what exactly this vehicle will do? As far as I understand, it will allow institutional investors to put their money into crypto, using an insured vehicle. They will not buy Bitcoin (well, some ETFs will allow them, but the majority won't), they will instead buy a piece of paper that says they own Bitcoin. Which is kind of insane. It's the same type of paper that led to the big crisis in 2008. Only this time that paper will not cover real estate assets, but crypto assets.
Personally, I don't think this is going to work. The whole hysteria around ETFs and how they will "open" the markets to big pockets and so on and so forth, seems a bit too toxic for my taste.
I don't want to dabble in conspiracy theories, but it looks like big money wants to take over crypto. Big money is centralized. Crypto is not. Or, at least until now, it wasn't (although with the increase in Bitcoin mining difficulty, a 51% attack scenario is more and more plausible, as more small miners get out of the game).
So, I don't think an ETF for Bitcoin will move the markets up. I don't think Bitcoin will benefit from it.
But I do think the crypto world will somehow modify what we think now it's "money" and that will bring more freedom to the people. The same way web modified what we thought it's "information" and brought a lot of new wealth and freedom to a lot of people.
I just don't think it will happen with a Bitcoin ETF, that's all.
Thoughts?
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
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Agree with you.
Everything in the "hands" of Wall Street" will (just like the stock market right now ) be rigged. They then will be able to make the price/value as high or as low as they want.
Who knows ETF might work, probably not for long but for a shorter time :)
I hope to see the market going up at this day
Crypto markets are still a very new concept to traditional economy. As Bitcoin keeps growing in acceptance and volume, traditional markets try to implement old instruments with the new asset because that is much easier than thinking on the benefits of the new invention and designing instruments to take all the advantage of that. We are still in a transition period, some traditional instruments and tools will end up being launched but my personal view is that until the financial markets finally evolve to treat crypto as a new asset class and develop the tools for institutional money to use it, we will not see the strong growth we are all expecting.
I increasingly see big government and big business hand-in-hand. Whats good for big government can best be done by big business i.e. regulation and reporting and so big gov't and big business are in this together. Big gov't has proven it will protect big business. So ETFs may be good for investors wanting to see cryptocurrencies appreciate (although as you point out that is not a certainty) but I don't think they are good for the pure decentralized crypto philosophy
so far institutional money hasn't been very good fro crypto as far as I can see. Let's see what happens now.
I think I'm leaning in the same direction as you.
Ideology started the crypto movement, but greed has taken over. In a decentralised world, where nobody is "in charge", the more bad actors who enter the space, the more the balance tips is their direction.
ALL investors want to see their investment rise, but financial institutions are not normal investors. They're quite happy to squeeze the life out of something in order to profit from it - then leave the party when the profits have dried up.
Some might call this FUD (because anything which might be said against their opinion must be, right?), but for me, the longer the "big money" stays out of crypto the more chance crypto has of deflecting these blood-suckers when they do arrive.
May be This dependancy on ETF is the reason behind rejection... It's a good idea to reject a couple more ETF proposals and let the prices kiss the floor... Then would be the perfect time for the big money to be invested in bitcoin and have the ETF finally approved to start a bull run..
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I once read a post on facebook early last year predicting the total control of bitcoin by wealthy corporate investors as you have said, but I know next to nothing then.
This post of yours shed more light on it.
Does this fit in ?
Thanks @ dragosroua for this x-ray and prophessy about the happenings in current crypto World!!
Nevertheless, no matter the positioning of SEC and intervention of other institutional players; VALLUES , measured by need/ availability complex would be the long term determinant of WELL BEING of ALL encrypted currency market..