Subject: File No. SR-CboeBZX-2019-004
From: Shravan Kumar
Affiliation:

Mar. 29, 2019

Hi,   
          
I have read with interest the proposals and what is currently being said by the general public in forums, chatrooms and crypto-magazines and would like to convey my thoughts on the matter of Bitcoin ETF’s.  


I firmly believe that in an unregulated and manipulated market (common knowledge) an ETF has no place.  

Ponzi and MLM schemes such as the recently shut down BitConnect who promised returns of up to 120% returns per year (risk-free!) are all too common (https://cointelegraph.com/news/bitconnect-closes-virtually-its-entire-operation-bcc-token-drops-87).  
With individuals who have ‘Low Protected Values’ operating with impunity in such an environment, it is important not to send the wrong signal to this community by supporting an ETF without the proper Legal and Regulatory Framework in place to protect the broader public from such predators. 


Before an ETF can be let loose on the world we need to consider factors such as ‘price discovery’, and this is an important point. Firstly in something that cannot be valued (at the moment) how does an individual understand what fair value for Bitcoin is?  Also with the use of Cryptocurrency Trading Automated Bots and the speed at which news both fake, genuine and sponsored travels in this fledgeling marketplace I do not think without establishing a Legal and Regulatory framework first, genuine ‘Price Discovery’ will even be possible at all.  


Then there is the real question of the purpose behind the ETF and what it will achieve as the Bitcoin Futures did. If we are honest with ourselves, the two primary intentions behind this project are to allow it to become part of the mainstream investor's portfolio, increase the mass adoption of cryptocurrencies which will drive up the price through mass speculation. In these points leading to the mass speculation, I see no legitimate desire to protect consumers or drive regulation. 
  
Finally what is worrying is the level of understanding of Financial Investment for those ‘on the ground’ who participate in investing in Cryptocurrencies is. An example is the majority of the people whom I have spoken to in my professional and personal life who invest in Cryptocurrencies (and is their first investment area), and I have asked their understanding of what a diversified portfolio is- the usual answer is ‘Buying different cryptocurrencies’. This fact is a product of how Portfolio Diversification is described in most online Cryptocurrency magazines. There is no understanding or appreciation of different asset classes or the need for a genuinely Diversified Portfolio. (I come from an Investment Banking background). 


It is not the time to encourage further mass speculation just when reason is returning, and only after people have incurred massive losses in this universe.  


Many Thanks, 
Shravan