Shortly after CBOE withdrew a bitcoin ETF application, they’ve now reapplied, asking the Securities and Exchanges Commission (SEC) to give them permission to list a fully bitcoin backed securities product.
That makes this the fifth year and pretty close to the sixth year of an attempt to get an ETF in the United States with the first application filed in 2013.
It took SEC four years to respond, and then it said no in 2017. At that same year, crypto ETF applications were filed almost everyday. Some were rejected, some were pushed back, some of the rejected ones were reopened, and some of those reopened ones were pushed back.
Bureaucracy at its finest with the free market begging some unelected rich men and women to give them permission to engage in free and voluntary trade.
Four men and women to be precise. Two republicans, a democrat, and the former bankers’ lawyer, Jay Clayton. A fifth commissioner is yet to be appointed. Once that happens, this fifth man or woman may well hold immense power over the economy as they may have the decisive vote on many issues.
Trump therefore may well be thinking of leaving it as it is. A potentially risky decision that may affect the outcome of the 2020 election for there are certain fundamental reforms that have become necessary in this digital age.
Initial Public Offerings are plummeting. That has considerable implications for the economy and for inequality because ordinary savers can not tap into decent investments with private company investments limited to only the very rich.
As any high-street can attest, dynamism in the economy has been chocked by considerable red tape, permission slips even for lemonade kids, and by the barbaric investment prohibitions that keep making the rich richer while the rest are locked in lower wages due to lack of funding to strike it on their own.
It is the case that Trump was primarily elected as the war and peace president, and there he delivered. Whether that will continue, however, remains to be seen after his appointment of the architect of the Iraq war, John Bolton, who has already made it quite clear he is thirsty for more blood.
Yet while that advancement of peace, so far, does tie our tongue in criticisms of Trump, his failure to advance much on the real economy – rather than the debt fueled one – may make any 2020 decision quite difficult for voters.
That’s because 2020 may well be the economy election now that the question of war and peace has hopefully been addressed.
On that front, the debut of the most innovative technology on the world’s biggest stock market may well be a catalyst of optimism for proud America can hail once more that march of ingenuity and innovation.
SEC hasn’t so far because they claim there isn’t enough surveillance of traders to determine when there might be price manipulation.
That argument, objectively, no longer holds water. CME’s bitcoin futures alone handle at times 3x Coinbase’s trading volumes. In addition, some seven crypto exchanges have entered a surveillance agreement with Nasdaq. In South Korea, regulators there recently took action against an exchange CEO that they claim allowed for price manipulation. This argument in 2019, therefore, no longer applies at a reasonable level.
With that out of the way, there is little objective reason SEC can give to prevent new crypto products from entering the market. A negative decision, therefore, would probably be seen as a political decision.
SEC certainly can’t be seen to be politically biased because that would collapse any trust level that remains in this agency which has been plagued by scandals, the latest one being the hacking of pre-ipo or ico information that gave the hackers considerable advantage in the market.
Thus they may well surprise and actually give this ETF, but it does appear unlikely as the commission is currently in a stalemate, with 2 probably against and 2 in favor.
In other times such stalemate would have been nice, but at a time when it has become quite clear that real reforms are needed on how the digital economy is regulated, it is unclear how America can continue affording stagnation especially if Europe does end up uniting in a resurgence to provide a real alternative.