2nd July 2023 > > Maximalists and ETFs.

tl;dr

Gensler may have an ETF get-out clause. Maximalists will never get it.

Market Snap

Market Wrap

Stop-losses for BTC shorts are concentrated between $32k and $35k whilst leveraged longs are spread between $23k and $14k with a peak at $15k. A long squeeze will likely peter out, but a move above $32k will lead to cascading liquidations. Price moves during squeezes are dramatic and rapid – if we see $33k then bursting through $35k and above is a reasonable target, taking us back over 50% of the all-time high.

Curious Cryptos’ Commentary – ETFs

Following the SEC’s statement that the recent spate of applications for a spot BTC ETF were “sufficiently clear and comprehensive” with regards to the SSA (surveillance sharing agreement) both Nasdaq and Cboe – who file the applications on behalf of investment managers such as Blackrock and Fidelity – amended the forms to state that Coinbase will be the market provider.

The Cboe said Coinbase's platform "represents a substantial portion of U.S.-based and USD denominated Bitcoin trading."

The SEC is currently litigating against Coinbase by claiming that Coinbase has traded securities without authorisation from the SEC. However, as the SEC agrees that BTC is a commodity, it is hard to argue against Coinbase’s pre-eminent position as a marketplace for BTC.

But there is a potential Catch-22.

I read reports that an SSA must be supported by a “significant, regulated marketplace”.

As BTC is a commodity, and the SEC refuses to register Coinbase for selling securities (Coinbase denies it sells securities) Coinbase might not pass the test of being regulated. It is a public company, and perhaps that standing means it passes the test. Certainly, Blackrock et al believe that to be so, but is this the get-out clause for Gary Gensler?

Let us hope not.

Curious Cryptos’ Commentary – Maximalists and ETFs

Ben Caselin writing for CoinTelegraph:

“BlackRock’s potentially oversized impact on Bitcoin’s price trajectory should give everyone in the Bitcoin community pause for thought rather than be a cause of celebration.”

“… they demonstrate how the more deeply involved traditional finance (TradFi) entities become in the digital assets space, the more we risk Bitcoin becoming just another asset class and losing sight of its intended purpose and true value proposition.”

“… but the broader issue with ETFs is that investors cannot withdraw the underlying Bitcoin. It’s in the ownership of Bitcoin that the true benefits lie.”

Ben, mate, if TradFi isn’t involved, cryptos will forever remain a niche product. BTC could never fulfil its potential.

…

Then the picture gets darker:

“… if a rule is ever proposed that demands retail can only invest via ETFs rather than through direct ownership, this is not “consumer protection.” It spells their disempowerment.”

Caselin claims to be a proponent of decentralisation. But this comment is a conspiracy theorist type of thinking.

Which completely misses the point of decentralisation.