Mar. 23, 2019
Hello, After the Bitwise publication I say no to the proposed application for an ETF. I can see that they have tried to allay any concerns, but have in turn raised more questions than provided answers. 1) Manipulation is a prime issue. The BTC market is a global interconnected one and if 95% of exchanges are reporting fake volume (is this data reliable?) then relying on 5% to base an ETF on is highly unwise action to take 2) It also raises liquidity concerns in the long run (run a Markov Model, it is not good!). Bitwise itself has stated in one of the documents to the SEC that "Possible illiquid markets may exacerbate losses." as a risk (Page 9)(https://www.sec.gov/Archives/edgar/data/1746379/000149315218010390/forms-1.htm#a_001) 3) On page 93 of their presentation to you they state " We draw prices from 10 crypto exchanges representing substantially all of the trading volume in the spot bitcoin market". We have to take their word for it. It needs to be verified and the 10 exchanges chosen do seem rather convenient for them to build their case upon . 4) They talk a great deal about NAV in the presentation but as one of their risks in another document they state "The NAV may not always correspond to market price and, as a result, investors may be adversely affected by the creation or redemption of Creation Baskets at a value that differs from the market price of the Shares." and "Investors may be adversely affected by an overstatement or understatement of the NAV calculation of the Fund due to the valuation method employed on the date of the NAV calculation" (page 20) (https://www.sec.gov/Archives/edgar/data/1746379/000149315218010390/forms-1.htm#a_001) Manipulation, liquidity concerns the real risks Bitwise and other ETF applicants have stated to participant's in such a Financial Instrument means it is not prudent to go ahead with this venture. Many Thanks, Carl Ross Sent with ProtonMail Secure Email.