Bitcoin (BTC) Miners Sell Most in 5 Years

Is the US Securities and Exchange Commission trying to manipulate the supply of bitcoin?

When CME Group first launched bitcoin futures In 2017, the company’s honorary president, Leo Melamed, announced that he would tame bitcoin. Since then, many ETFs have been approved by the Securities and Exchange Commission. But with exchanges increasing the supply of BTC by selling “fiat bitcoins,” questions of market manipulation started to arise.

melamed Tell Reuters at the time, “We will regulate, make bitcoin neither wild nor more brutal. We will tame it into an ordinary type of tool for trading with rules.”

An exchange-traded fund, or ETF, allows investors to buy an asset that tracks the price of bitcoin. But without directly owning the underlying asset. In the United States, such funds fall under the jurisdiction of the Securities and Exchange Commission (SEC).

Structured similarly to an IOU, an informal document recognizing debt, an ETF takes the form of a paper that can be exchanged during the process of a trade. Observers are concerned whether fiat bitcoin is intended to manipulate the underlying asset with the help of the SEC as a regulator.

Bitcoin manipulation: Banks want control

James Crypto Guru, Founder and CEO of Crypto Platform Magic Crafthe told BeInCrypto.

“In a way it controls and manipulates. But people understand that they want Bitcoin from the blockchain and with time [banks’ BTC holding] “The volume will be much smaller than the overall market,” said the trader and YouTube influencer.

James Crypto Guru predicts that the market manipulation issues will drive the Bitcoin price lower in the short term. But in the long run,”[this will be] Too good for adoption.”

Supreme Education Council agreed First Bitcoin ETF to invest in futures contracts in October 2021. Proshares Bitcoin Strategic Fund launched on the New York Stock Exchange on October 19, becoming the first ever Bitcoin ETF in the United States of America.

Nearly $1 billion worth of shares were traded during the first day of trading. After the approval of the ETF, the price of bitcoin soared to $64,124, which was a record high at the time. But bitcoin has it Fell 75% since then, to $16,500 as of this writing.

Cryptocurrency analyst Willie Woo commented that a bitcoin futures ETF would be bad for retail investors because it puts institutional investors like hedge funds at an advantage.

“In my opinion, it would be an expensive way to hold BTC,” Woo chirp and then. “The exchange-traded fund is effectively using owning Bitcoin to hedge funds through a series of profit incentives,” he said.

Woo argued that the Bitcoin futures ETF has “price suppression potential and more.” volatility Because of the futures dominance.” This is because he expects BTC futures To get a higher price compared to the spot rate due to the large and long positions opened by hedge funds.

gold standard

In the gold markets, it is common for ETFs to drive prices now. It is also used to discover prices, according to experts. This same practice appears to have been adapted to the Bitcoin markets as well.

CME Group Claims The Bitcoin futures contract will help investors “benefit from efficient price discovery in transparent futures markets.”

Serhiy Zhdanov, CEO of Cryptocurrency Exchange EXMO, told BeInCrypto that a fiat bitcoin entry should be checked. “Manipulation of financial markets is a serious problem not only for cryptocurrencies but also for publicly traded assets,” he said.

“When it comes to the CME, the SEC acts as a watchdog that guarantees assets Safety. The creation and regulation of these assets must be transparent and understandable to investors. This gives them confidence that their investment is safe.”

BeInCrypto has reached out to SEC Commissioner Hester Pierce, but was not available for comment “due to business pressures.”

Chris Esparza, CEO, Inc Vault FundingHe said that the intent of Bitcoin futures contracts was never to manipulate the underlying asset, though that could happen. He went on to warn of potential scammers.

“The goal is to open up trading to more investors without having to physically deal with the underlying asset. Unfortunately, that also allows people to trade in things they don’t have,” Esparza told BeInCrypto.

“The effect is great. When people can trade futures and Bitcoin without holding the physical asset. Paper Bitcoin can have a huge impact on the price when it is bought and sold.”

Not all gloom and doom

Bitcoin’s core value comes from two things. First, unlike other crypto assets, BTC is truly decentralized. Secondly, its rarity, with a maximum limit of 21 million coins.

However, Bitcoin ETFs increase the supply of Bitcoin by selling fiat Bitcoin. Investors do not have to hold any BTC directly. Increased supply decreases the value of the currency.

“So, regardless of whether the goal is to manipulate the underlying asset, it certainly happens to some degree,” according to Ben Sharon, founder and CEO of the Gold Token platform. illumshare.

It’s not doom and gloom with Bitcoin futures. Andrew Weiner, Vice President, Asian Cryptocurrency Exchange Mexicoexplained that the so-called Bitcoin paper manages the skepticism held by people who know very little about cryptocurrencies.

“The emergence of more and more fiat bitcoins shows that BTC’s compliance and maturity have been widely recognized by the market,” Weiner told BeInCrypto via email.

“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 boost BTC to a new level.”

Serhiy Zhdanov, CEO of the EXMO stock exchange, shares Wiener’s point of view. Zhdanov provided a list of benefits supposedly derived from Bitcoin ETFs. It includes diversification, “flexible risk management, the opportunity to hedge positions, and institutional capital flows.”

“The idea behind bitcoin fiat can hardly be called manipulative because it serves the development of the sector as a full participant in the financial industry,” Zhdanov explained.

“The positives of such an asset outweigh the negatives. But it is necessary to make a basic assessment of the fund or exchange that issues such types of assets as no one wants to lose money.”

If managed well, Zhdanov said, fiat bitcoin could work in the same way as fiat money, oil, silver, and copper, among other commodities. He said that Bitcoin ETFs will have a positive impact on BTC pricing due to the increased participation of institutions.

Bitcoin BTC Dominance BTCD

The threat of decentralization

A bitcoin futures ETF might be good for mainstream adoption. However, this may run counter to the decentralized ethos that BTC represents.

There is concern about BTC being “captured” by hedge funds and big banks, which could end up manipulating the price.

“BTC as a decentralized bearer tool is key. Imagine if all of your bitcoins were held as an ETF held by a single provider.” He said Willie Woo last year.

“This provider can now change the conversion ratio, and later separate it as a new fiat. This happened to gold when we were following the monetary gold standard.”

SEC Chairman Gary Gensler has shown his support for bitcoin futures trading funds that “provide significant investor protection,” as stated under the Investment Company Act of 1940.

However, the full benefit of the idea will emerge when there is better stability in the market. Experts say that this is especially true in relation to political events that affect the market and the dynamics of the economy.


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