© Reuters. Is the US SEC Trying to Manipulate Bitcoin Supply?
BeInCrypto – When CME Group (NASDAQ: ) announced the first contract for . Since then, the SEC has approved several ETFs. But when exchanges increased supply by selling “paper Bitcoin,” questions about market manipulation began to arise.
Melamed told Reuters at the time: “We will regulate, we will make Bitcoin not wild or wild. We will tame it into a regular trading tool with rules.
An exchange-traded fund, or ETF, allows investors to buy assets that track the price of Bitcoin. But without directly owning the main asset. In the US, such funds are regulated by the Securities and Exchange Commission (SEC).
The structure is similar to an IOU, an informal document acknowledging debts, ETFs come in the form of a piece of paper that can be exchanged during the trading process. Observers worry if the purpose of “paper Bitcoin” is to manipulate the underlying asset with the help of the SEC as a regulator.
Bitcoin Manipulation: Banks Want Control
“Banks are trying to take control, but it’s also a common system they use,” James Crypto Guru, founder and CEO of cryptocurrency platform MagicCraft, told BeInCrypto.
“He’s controlling and manipulative in a way. But people are realizing that they want Bitcoin from the blockchain and their size over time [tenencia de BTC de los bancos] it will be much smaller than the overall market,” said the trader and YouTube influencer.
James Crypto Guru he expects the price of Bitcoin to fall in the short term due to market manipulation. But in the long run[esto será] very suitable for adoption,” he added.
SEC Approves First Bitcoin ETF Investing in Futures in 2021 October month. The Proshares Bitcoin Strategy exchange-traded fund launched on the New York Stock Exchange on October 19. and became the first Bitcoin ETF in the United States.
Almost a billion dollars worth of shares changed hands in the first day of trading. After the ETF’s approval, Bitcoin price rose to $64,124, a record at the time. However, Bitcoin has since fallen 75% to $16,500 at the time of writing.
Cryptocurrency analyst Willy Woo commented on this A Bitcoin futures ETF would be bad for retail investorsbecause it gave an advantage to institutional investors such as hedge funds.
“In my opinion, this will be an expensive way to hold BTC,” Woo tweeted. “The exchange-traded fund effectively transfers Bitcoin investments to hedge funds using a chain of profit incentives,” he said.
Woo said the Bitcoin futures ETF has “potential price reductions and higher volatility due to futures dominance.”
It is because expect BTC futures to appreciate relative to the spot price due to large long positions opened by hedge funds.
It is common practice in the gold markets that ETFs now lead the price. According to experts, they are also used to set prices. The same practice appears to have been applied to the Bitcoin markets.
CME Group says its Bitcoin futures contract will help investors “benefit from efficient pricing in transparent futures markets.”
Serhii Zhdanov, CEO of cryptocurrency exchange EXMO, told BeInCrypto that the introduction of paper Bitcoin should be explored. “Financial market manipulation is a serious problem not only for cryptocurrencies, but also for other publicly traded assets,” he said, adding:
“When it comes to CME, the SEC acts as a watchdog to ensure the safety of the assets. The creation and regulation of such assets must be transparent and understandable to investors. This gives them confidence that their investment is safe.
BeInCrypto reached out to SEC Commissioner Hester Peirce, but she was unable to comment “due to business pressure.”
Vault Finance CEO Chris Esparza said Bitcoin futures were never intended to manipulate the underlying asset, although that could happen. He went on to warn about potential scammers.
“The goal is to open up trading to more investors without having to physically manage the underlying asset.” Unfortunately, it also allows people to trade things they don’t own,” Esparza told BeInCrypto. He later noted:
“The impact is big. When people can trade futures and Bitcoin without having physical assets. “Paper Bitcoin” can have a huge impact on the price when it is bought and sold.
It’s not all gloom and doom
The main value of Bitcoin comes from two things. First of all, unlike other crypto assets, BTC is truly decentralized. Second, its lackthe highest offer – 21 million coins.
However, Bitcoin ETFs increase the supply of Bitcoin by selling paper Bitcoin. Investors are not required to hold any BTC directly. An increase in supply lowers the value of the coin.
“Whether or not the intent is to manipulate the underlying asset, it’s definitely happening to some extent,” said Ben Sharon, founder and CEO of tokenized gold platform Illumishare.
That’s not all with Bitcoin futures. Andrew Weiner, vice president of Asian exchange MEXC, explained that the so-called “paper Bitcoin” deals with the skepticism of people who do not know much about cryptocurrencies.
“The emergence of more and more paper Bitcoins shows that the compliance and maturity of BTC has been very much recognized by the market,” Weiner told BeInCrypto in an email. by post
“This not only accelerates the entry of traditional institutional investors and other traditional traders, but also increases the confidence of cryptocurrency users.” Paper Bitcoin will introduce funds from the traditional financial world, which is expected to take BTC to a new level.
EXMO Exchange CEO Serhii Zhdanov agrees with Weiner. Ždanov made a list…