VanEck launches Bitcoin futures ETF, spot unlikely

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Global investment manager VanEck officially launched its Bitcoin futures ETF on November 16. Named the “VanEck Bitcoin Strategy ETF,” it will trade under the ticker XBTF and will invest in BTC futures contracts.

However, VanEck’s application for a spot ETF that would trade actual BTC is unlikely.

A proposed rule change to allow a spot ETF denied

On November 12, the U.S. Securities and Exchange Commission (SEC) denied the global investment manager’s application for a proposed rule change that would have paved the way to list and trade the VanEck Bitcoin Trust.

The denial claimed that the party which applied for the rule change, Cboe BZX Exchange, Inc., had “not met its burden…to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.” The U.S. securities regulator is also concerned with the possible “manipulative activity involving the purported ‘stablecoin’ Tether.”

This is hardly a surprise, given that SEC chief Gary Gensler recently likened the digital currency industry to the Wild West and vowed to bring it to heel. Gensler has made no bones about the fact that he views much of the industry as fraudulent and that it needs to change.

Going into further detail on why the SEC refused the proposed rule change, the order explains that an exchange can meet its obligations by having a “comprehensive surveillance-sharing agreement with a regulated market of a significant size related to the underlying or reference Bitcoin assets.”

A Bitcoin anarchists worst nightmare

Surveillance? Regulation? Could it be that the very things the Bitcoin anarchists vehemently oppose are the same things needed to inject fresh cash into the markets to make the number go up further? Could it be that the institutions are not coming precisely because the BTC industry is run by ideologues who refuse to comply with basic checks to prevent crimes like money laundering and terrorist financing or who want to avoid the required surveillance precisely so that they can continue to manipulate markets at will?

We know by now that BTC serves no purpose other than to increase the wealth of existing holders by sucking in fresh fiat currency from retail and the always-promised but never quite arriving institutional speculators. However, if this order is anything to go by, some big changes are going to be needed before the fabled spot BTC ETF becomes a reality.

The order further elaborates that the surveillance-sharing agreements are needed to “provide a necessary deterrent to manipulation because they provide the necessary information to investigate such manipulation if it were to occur.”

It’s a Catch-22. Enable regulators to gather the information that will likely lead to the downfall of schemes like Tether and the exposure of the true extent of the manipulation in BTC markets, or don’t, and the much-touted BTC spot ETF will never become a reality. Ouch!

Rules and regulations are necessary

Once again, we see clear evidence of what we’ve been promoting at CoinGeek since the beginning; regulations and the law are not something to be feared and shunned, but rather are necessary for the industry’s growth and advancement stability of the world as a whole.

The message consistently heard from regulators is clear: until “crypto” grows up and complies with the rules, it won’t be able to sit at the big boy’s table.

Learn more about Bitcoin investments with this new ebook, Investing in Blockchain: Better data for a better world

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRipple and
Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

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