Representatives of VanEck, SolidX, and CBOE BZX Exchange again tried to convince officials from the US Securities and Exchange Commission (SEC) that the cryptocurrency market is ready for bitcoin-based funds (ETF).
Companies drew the attention of the Commission to the fact that the cryptocurrency market is already mature enough to launch new products. So, supporters of financial innovations noted that the products they offer are not much different from the tools already on the market, including ETFs based on oil, gold or silver.
“Similar to commodity futures, the spot and futures prices of bitcoin are tightly linked,” again providing “evidence of a well-functioning capital market,” added the representatives of the firms, stressing that such a link indicates “efficient capital markets”.
Representatives of the companies also expressed the opinion that the Bitcoin ecosystem is “less subject to manipulation,” unlike other financial products based on commodities. For example, insiders of the traditional market may be the first to know about the discovery of a new field, which may in the future affect the supply of goods, putting pressure on the price.
Thus, companies are confident that the cryptocurrency ecosystem is less susceptible to the problem of information asymmetry.
“The linkage between the bitcoin markets and the presence of arbitrageurs in those markets means that the manipulation of the price of bitcoin on any single venue would require manipulation of the global bitcoin price in order to be effective. Bitcoin, therefore, is no more susceptible to manipulation than other commodities, especially as compared to other approved ETP reference assets,” added VanEck, SolidX, and CBOE representatives.
Also during the conversation, ETF supporters reminded the SEC about the CBOE-developed matching engine and the MVIS Bitcoin US OTC Spot Index from VanEck .
The other day, the head of the U.S. Securities and Exchange Commission, Jay Clayton said that Bitcoin-ETF will not be approved until the problem with market manipulation is solved.
“How that [manipulation] issue gets addressed, I don’t have a particular path. But it needs to be addressed” before an ETF gets approved, Clayton remarked during CoinDesk’s Consensus: Invest conference. “The prices retail investors are seeing are the prices they should rely on, and free from manipulation – not free from volatility, but free from manipulation,” Clayton added.
He also touched on the question of which ICO tokens can be classified as securities.
“If you finance a venture with a token offering, you should start with the assumption that it is a security.”
On the other hand, Clayton admitted that in some cases it is quite difficult to attribute a token to one category or another. For example, when it came to Ripple and its XRP digital asset, then, without going into details, the head of the SEC said that some of the questions require a lot of additional information.