September 22, 2018
Dear all,
An approval of an ETF would definitely stabilize the Bitcoin market and make it less risky and easier to invest in Bitcoin. It is actually one building block that helps to protect the investors. In my opinion it does not make sense to wait for regulated exchanges in the US in order to approve an ETF. Bitcoin might be still a risky investments in terms of its future potential and use case but that has nothing to do with the ETF product itself. For me, the SEC's job is to determine wether the ETF product is safe in terms of investor protection, not the underlying asset or markets. Investing in Bitcoin is a risky investment, with or without ETF. Investors should anyway be aware of that.
The market on unregulated exchanges is currently in the hands of retail investors. But the volume on unregulated exchanges is only around 25% of the total BTC volume. Most of the volume is traded in the OTC markets. This part is in reality a "shadow" economy which has no influence on price and not seen be retail investors. Can the market price on unregulated exchanges be manipulated right now? Well, there are bigger players with just more money and volume than others. Their trades may have a big impact on price. Is this manipulation. In my opinion it is not. It may be bad for retail investors but it is not manipulation. In order to protect retail or smaller investors there needs to be more volume in this rather small market. Does the market have to be more stable first in order to get an ETF approved or should it be the other way round that an ETF needs to get approved first so that the market can stabilize. In my opinion, definitely the latter. This is the first time in history that retail investors build up a market before even institutional investors can go in. Normally it is the other way round. Therefore the first (stability and then ETF) does not work in this case and it is an illusion that this is the way to protect investors.
I currently don't see and cons why this particular ETF should not be approved. It is going to be offered by well know and trustworthy entities, it offers custody and insurance and there is a minimum investments amount in order to prevent small investors at this current stage.
One more thing. Other countries, regulators are moving much faster than the US. In others parts of the world regulatory issues are already solved, financial products offered and regulated. Personally I don't understand why in the US processes are so slow. It used to be a innovative countries, an enabler for new technology. At the moment it seems the US is rather on an slow motion train compared to other countries. I am not an US citizen but being an American I would rather be concerned.
Sincerely,
Alain Furter