Nov. 30, 2023
I wanted to comment on the questions asked by the paper "Proceedings to Determine Whether to Approve or Disapprove SR-CboeBZX-2023-072 and Grounds for Disapproval under Consideration". 1: ETFs in general suffer from the Oracle issue, which BTC solves trough its POW mechanism, which makes it publicly confirmable and verifyable. The issuer of the Trust can simply give out shares which are not backed with any BTC at all, and there is no way in verifiying this other then "Trusting" the issuer which is exactly what BTC is solving. Therefore ETFs are easily maipulativeable and should be treated with caution. 2. The BTC market share is tiny compared to well established commoditys like gold and oil. Meaning that with the introduction of a Spot ETF, which opens the door to BTC for big instutions who have huge amount of funds and investing power, can and will inevitably result in liquidity crunshes and marked manipulation. just to put things into perspective GOLD has a market cap of 13,6 trillion $ compared to BTCs 676 Billion $. 3. Firstly BTCs transaction speed is NOT slow, indeed it is coded to only process transaction every 10 min but there is a lightning network which is capable of processing 1 million transaction/sec. which means the time it takes to do markt manipulation is NOT long and can be done in a blink of an eye. Secondly the trasnaction speed doesnt matter anyways becouse of the previously mentioned Oracle issue which also includes exchanges. Nobody can guarantee that those even hold the BTC like we saw with FTX. 4. The proposal of Coinbase is NOT good enough, who tells us that they and the other institution are trustworthy? This suffers from the same issues i have stated multiple times. 5. The correlation between the spot BTC market to the CME Bitcoin-Futures-Market is solely the fact that participants can predict in which direction the spot market most likely will move beased on the "bets" placed on the Futures market. Futures dont move the Spot market becouse no actual BTC is bought there, just betting io its direction. Some suggestions to enhance security and fight market manipulation. Regarding Q 3, EVERY single exchange should be legally obliged to have a proof of funds concept which gets controlled in a timely manner by a third party. This may still require trust from us customers but its just a BASIC necessesity in this industry. Also it has to be publicly verifyable through the knowledge of those wallet adresses. Q 4. MUST be solved by requiring the iussuer of the shares to also publicly share the corresponding wallet in which the BTC which back the issued shares are held in. This way there is no way of manipulating the amount of shares in circulation without it being immidiatly recongisable. If this wont be implemented i am sure at some point the ETF will decouple from the actual BTC price which in turn could even cause a systematic risk not only for BTC but for the market as a whole. With all this being said i am hoping to see those adjustments and laws enforced if it comes to a BTC spot ETF, and at this point i want to thank you for actually asking the public about this, instead of deciding this behind close doors. P.S. im no native english speaker so pardon me for any mistakes, i whish anyone who reads this a great day and good life in general.