August 18, 2018
Dear SEC,
I stand opposed to any ETFs connected to Bitcoin or any other cryptocurrency. The reasons for my opposition are obvious, simple and evidence-based.
Leaving aside the fact that almost all cryptocurrencies are unregistered securities created by a wave of fake start ups who have stolen millions of dollars from retail investors, let's focus on Bitcoin itself.
We don't know who started Bitcoin for sure. The latest insider speculation is that a volatility trader working in New York and then London created Bitcoin after befriending a circle of traders who were conspiracy-theory minded libertarians and cult-members.
What we do know for sure is that Bitcoin propagandists tend to have incorrect beliefs about how economies should function. They don't understand the role of inflation and they are among the least productive citizens. I have yet to see them create meaningful products, jobs, or companies that add value to the global economy. They are engaged almost solely with zero-sum games and game theory.
There are also major threats present.
The two groups with the largest Bitcoin holdings are:
1. DarkNet criminals who gained most of their cryptocurrency wealth from 2011 to present from trafficking narcotics and child sex slaves.
2. The Chinese government.
We will come to the latter in a moment. The first group, DarkNet criminals, are well documented in the Silk Road case and also in the documentary 'I Am Jane Doe' which tells the story of how child traffickers accumulated a large number of Bitcoins via adverts published on Backpage.com, the website subsequently seized by the FBI.
We must be mindful of the fact that this group of hardened criminals most likely still owns a large percentage of Bitcoins as they have been lead to believe the value will continue to rise until the "currency" is legitimized as a financial instrument. The rise in Bitcoin's questionable value, which comes with its own controversies, in recent years has made holding them immensely profitable for the first group. Not only did they make an immediate profit at the time of trafficking drugs and child sex slaves, but they have continued to profit from retail investors buying into the pyramid scheme structure of Bitcoin.
The lack of genuine liquidity in the cryptocurrency sector, even over-the-desk trades, also meant it would have been very difficult for them to convert much of their Bitcoins to cash. We must believe they have continued accumulate cryptocurrencies instead.
This is a threat to society and politics. Criminals who become enormously wealthy in such a manner are bound to become a threat to democracies if they choose to become politically influential.
We now move on to the second largest group of Bitcoin holders - the Chinese government and their associates.
Bitmain are the operator of the largest Bitcoin mining facilities and they are also the largest manufacturer of Bitcoin (also Litecoin and Ethereum) mining machines which they ship globally. They have achieved this hegemony by being subsidized by the Chinese state. The massive amount of electricity they consumed was free and possibly the hardware itself was also subsidized. This would not be allowed to happen in China without the state benefiting from Bitcoin. China's recent stances against cryptocurrencies appear to be nothing more than a distraction tactic to avoid being implicated. They control the market.
Furthermore, we see from the Panama Papers that Bitmain is not an independent company and that it has layers of secret ownership.
https://offshoreleaks.icij.org/nodes/82022780
An explosion in the value of Bitcoin would make the Chinese state the de facto Central Bank of the world. With it they would be able to drain investment from western companies, channel the investment into their own companies, control national currencies by proxy, and control governments.
With all the above in mind, I cannot stress enough how dangerous a Bitcoin or cryptocurrency ETF is for global democracy. We must see it as nothing more than a tool for subversion, which cryptocurrency's most ardent supporters are happy to admit.
Yours,
J Mueller Jr