My Not Fully Thought Out Speculation \ stacker news ~bitcoin

2328 sats \ 44 comments \ @siggy47 21 May bitcoin

I'm not claiming to have fully thought this idea out, but I am wondering what everyone thinks.

News is everywhere that the SEC is about to approve Eth ETFs. For years, the SEC has been arguing about whether a given coin could be a security. ETH is clearly a security under SEC rules and the Howey Test. If eth ETFs are approved, it would be difficult for the SEC to prevent the floodgates to open to other coins.

So, taking this, along with the bipartisan vote last week allowing banks to hold digital "assets", could the US government be looking to have Big Bank and government friendly entities (ie BlackRock) control a new industry in a way to bolster the US financial system? The fact that Charles Schumer wants banks to hold bitcoin is a very big deal, IMO.

I haven't thought this through, obviously, but it seems as if opinions and attitudes are changing very quickly. Gensler and Warren may have lost the battle.

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154 sats \ 1 reply \ @0xbitcoiner 21 May

It's a bit of a conspiracy theory, but I think those in power are confusing people by pretending to disagree and then slowly taking over.

52 sats \ 0 replies \ @siggy47 OP 21 May

It does seem that way

247 sats \ 1 reply \ @BitcoinAbhi 21 May

SEC, as far as I know, don't understand anything about the fundamentals of Bitcoin. Now that the news is everywhere about Eth ETF, SEC is definitely blind now. They are now telling all other shitcoins to aim for being on the market. WTF! I don't understand why?

190 sats \ 0 replies \ @freetx 21 May

Gary, while a professor, gave lectures on Bitcoin and Crypto. From those lectures he clearly understands Bitcoin.

Here is the list of his required readings for his "Blockchain And Money" class he taught at MIT:

‘Conflict reigns over the history and origins of money’ Science News (July 29, 2018)
‘A Brief History of Money’ IEEE Spectrum (May 30, 2012)
‘What is Money? An Artist’s Make and Take’ Wall Street Journal video (November 11, 2014)
‘A Brief History of Ledgers’ LLFOURN, Medium (February 15, 2018)
‘Bitcoin and Cryptocurrency Technologies, Preface — The Long Road to Bitcoin’ (PDF - 18MB) Clark (pages 3 – 21) (February 9, 2016)
‘Bitcoin: A Peer-to-Peer Electronic Cash System’ (PDF) Nakamoto (October 31, 2008)
‘Blockchain Technology Overview’ (PDF) National Institute of Standards and Technology (January 2018) (pages 9 – 23, sections 1 & 2)
‘Blockchain 101 — A Visual Demo’ Brownworth, MIT (November 5, 2016)
‘21st Geneva Report on the World Economy - The Impact of Blockchain Technology on Finance: Catalyst for Change’ Chapter 1 (pages 1 – 7); Casey, Crane, Gensler, Johnson, and Narula (July 2018)
‘Blockchain Technology Overview’ (PDF) National Institute of Standards and Technology (January 2018) (pages 9 – 23, sections 1 & 2)
‘The Byzantine Generals Problem’ Lamport, Shostak, & Pease; ACM Transactions on Programming Languages and Systems (TOPLAS), 4(3), (July 1982) (required 382-387)
‘A (Short) Guide to Blockchain Consensus Protocols’ CoinDesk (March 4, 2017)

This is just his required reading, the optional reading list for his course goes into DAPPs, Smart Contracts, etc.

75 sats \ 0 replies \ @Undisciplined 21 May

I haven't thought this through either.

For some reason, it's reminding me of how gambling seems to be getting legalized in order to remedy the looming commercial real estate collapse.

People aren't using this asset that's important to the regime, so they create more use cases for it.

75 sats \ 3 replies \ @cryotosensei 21 May

My uninformed opinion is that because the Bitcoin ETFs had to use Coinbase to custody Bitcoin, the SEC and other government agencies want to prevent Coinbase from gaining too much power as a result. Which explains why SEC is suing Coinbase.

You must be worried sick. Take it easy. Do what you can. Network with others.

96 sats \ 1 reply \ @StillStackinAfterAllTheseYears 21 May

"We don't want Coinbase to have too much power" -- the slim overlapping Venn diagram of the SEC and SN.

21 sats \ 0 replies \ @siggy47 OP 21 May

😀

10 sats \ 0 replies \ @siggy47 OP 21 May

I don't know. The government sues their most connected, Cantillon trough chugging banks all the time. Paying fines is the cost of doing business.

74 sats \ 6 replies \ @grayruby 21 May

I definitely think this is politically motivated with the dems feeling they are losing on this issue and as you point out certain dems who would be perfectly happy to have the big banks controlling crypto.

At first I was annoyed at this news but the reality is without a staking element the eth etfs aren't likely going to do very well which might be another boon to bitcoin and separating it from the rest of crypto.

71 sats \ 5 replies \ @siggy47 OP 21 May

Can you explain this further? It's been a while since I read about eth. I do recall reading a while ago that it's more aligned to bank activites and more susceptible to manipulation. Also, what is the story with staking? Is it prohibited in the application, or did the protocol get fucked up when they moved to POS?

227 sats \ 4 replies \ @grayruby 21 May

Yes SEC made issuers remove staking from the filings. So it looks like the spot eth etf is a lock but it will not have staking rewards, which in my opinion really erodes its value proposition. I imagine that will come eventually but maybe SEC is keeping one toe in the water in case political winds shift again and they could argue that eth is a commodity but staked eth is a security (which is logical especially if you are staking with a custodian as most people do).

I think Larry Fink really wanted an eth etf. He wants to test tokenization of funds on eth (I don't think that's where they will eventually end up, my guess is it will be on a DTCC database) but if ethereum gets into the walled garden he can experiment with tokenized funds and sell them as being on an "approved" blockchain.

50 sats \ 3 replies \ @siggy47 OP 21 May

Thanks for all of this great information.

75 sats \ 2 replies \ @grayruby 21 May

I spend too much of my time following bitcoin and crypto twitter. It's good in times like these where there is goings on but overall it's a bad habit. Haha.

50 sats \ 1 reply \ @Bell_curve 21 May

Twitter is informative!

10 sats \ 0 replies \ @grayruby 21 May

This is true. It can be.

64 sats \ 1 reply \ @quark 21 May

For me it was clear that ETH ETF is going to be declined. But I don't know where all this positive news comes from. We will see. Your point is very well possible to be able to control it somehow. It seems banks like Ethereum more than Bitcoin. So we will soon know who is the boss.

20 sats \ 0 replies \ @siggy47 OP 21 May

I know. Everyone thought they would be denied until yesterday. Then Bloomberg changes the odds of approval from 25% to 75% overnight. I'm not on twitter, but I heard that the SEC tweeted that the applicants should immediately prepare for spot ETH trading.

64 sats \ 0 replies \ @Fabs 21 May

People are irrational at best, and straight-up suicidal at worst.
Everyone has their own little agenda; they tell you what they want you to know, not what you should know.

85 sats \ 4 replies \ @kilianbuhn 21 May

Big Bank and government friendly entities (ie BlackRock) control a new industry in a way to bolster the US financial system?

indeed not fully thought out. Blackrock isn't government friendly. They are friendly with their customers = shareholders. Shareholders want profit and therefore hate taxes. Thus makes them govenment hostile.

The govenment friendly players here are e.g. the FED or FTC. Also banks because they are in a middle men position profiting from the governments systemic monopoly. This doesn't apply to asset managers as they are not in this middle men position. 🤓☝🏻

0 sats \ 3 replies \ @siggy47 OP 21 May

https://www.thewealthadvisor.com/article/blackrock-unofficial-fourth-arm-government

15 sats \ 2 replies \ @kilianbuhn 21 May

being influential != being the government

Shareholders are an influential group in this world. So is the government. But that doesn't make them identical. They might align on keeping up the status quo. They don't align on many other matters

0 sats \ 0 replies \ @Bell_curve 21 May

Power and influence are related but different

0 sats \ 0 replies \ @siggy47 OP 21 May

I included them as government friendly entities, like big banks. I think I'm missing your point.

64 sats \ 0 replies \ @freetx 21 May

could the US government be looking to have Big Bank and government friendly entities (ie BlackRock) control a new industry in a way to bolster the US financial system?

I have a similar view. I think the realization of needing a "pure asset" on the balance-sheet is their only way out from a paper accounting level.

As it stands now, every single asset they add (except gold and some equities) is just another debt instrument.

Having a "pure asset" that could inflated forever is the only way to balance the books ultimately....

64 sats \ 0 replies \ @TNStacker 21 May

could the US government be looking to have Big Bank and government friendly entities (ie BlackRock) control a new industry in a way to bolster the US financial system?

There is no question. The U.S. government follows the lead of the big banks (Fed Banks) and they absolutely want to control the money.

54 sats \ 0 replies \ @kingzing131 22 May

With quite a number of banks trying to adopt stuff like RWA, or issuing bonds on blockchain, I can see the SEC getting immense pressure if they don't let ETF pass for major blockchains. Imo those will come eventually in one way or another

54 sats \ 0 replies \ @BitcoinIsTheFuture 21 May

This adds up. I think if they reject they gave lawsuits. What Larry Fink wants, Larry Fink gets.

54 sats \ 0 replies \ @Svoboda 21 May

I subscribe to Joe Carlasare's line of thinking where the issue here isn't with ETH being a security or not, it's with the fact that they already opened the door with the ETH Futures ETF. Once they SEC approved those, they sealed their own fate especially after Grayscale won their lawsuit.

Moreoever, unless other coins get Futures ETFs, I think you may see the SEC stop at BTC and ETH.

54 sats \ 0 replies \ @riberet19 21 May

I don't know if it's to strengthen the U.S. system or to break up the industry, it seems to me that it's more the latter.

54 sats \ 0 replies \ @xz 21 May

Seems like someone wants to siphon or leverage its technology stacks. Give a controlled opposition crypto a blue check for micropayments? There must be more to it than Gary and friends have a large Eth stack.

54 sats \ 0 replies \ @Silent_Hodler 21 May

I really hope this is an attempt to pump the market so whales can then short it when bad or neutral news comes out regarding these etf’s. It really makes no sense why SEC would allow to pump eth owners bags like that.

54 sats \ 2 replies \ @OneOneSeven 21 May

The fact that Charles Schumer wants banks to hold bitcoin is a very big deal, IMO.

When did he start taking this position?

61 sats \ 1 reply \ @siggy47 OP 21 May

When he voted last week to allow banks to hold it.

54 sats \ 0 replies \ @Bell_curve 21 May

Hmmm 🤔

54 sats \ 0 replies \ @justin_shocknet 21 May

The most entertaining outcome is the most likely, and ETH heads getting rekt is inevitable

If that turns out to be a bait-and-switch ETF rug i'm going to need more popcorn

54 sats \ 0 replies \ @BlokchainB 21 May

This idea that the SEC protects the general public from bad investments is laughable. People all up in arms that ETH is getting an ETF fail to recognize all the dogshit companies and other leveraged products that the public can gamble on that the SEC approves daily. The SEC just like the government is there to pick winners and losers they don’t care about the public

54 sats \ 0 replies \ @Satosora 21 May

no way that would be too much hassle

0 sats \ 2 replies \ @0xIlmari 21 May

I think approving an ETF on XYZ is perpendicular to ruling whether XYZ is a security/commodity/whatever. You can have ETF on anything, and indeed, I believe, ETFs on Bitcoin futures (which aren't commodities, but also not securities) existed before spot ETFs.

So ETH may very well still be ruled a security and still have an ETF on it - the ruling will only influence the legal framework under which the ETF operates, I believe.

Similarly, Howey Test outcome can be independent for ETH itself from any token issued on Ethereum or any other network. (Aside tokens that were clearly designed as scams from the get go, they are at best crowdfunding attempts, and at worst unregulated securities.)

There's also the fact that Gary seems to prefer "regulation through enforcement", therefore the onus is on the SEC to sue all the hundreds of thousands of tokens individually, putting the feasibility of this operation into question.

It's a mess of Gary's making.

0 sats \ 1 reply \ @siggy47 OP 21 May

I'm not sure. It's a good question. I don't know whether an etf of an unregistered investment security could fly. I guess we'll find out in the statement approving the etf.

54 sats \ 0 replies \ @0xIlmari 22 May

A fresh video from Bitcoin University exploring these exact questions.

No definitive conclusion, but worth a watch, IMO.

0 sats \ 2 replies \ @DiedOnTitan 21 May

An ETH ETF would be a "jumping the shark" move. It's a PoS (both senses of the acronym), pre-mined, speculative shitcoin. And it's centralized under Vitalik Buterin. What's next? Dogecoin ETF? A Bitcoin ETF is already unhealthy other than for glass handed NGU. An ETH ETF is a terrible move.

0 sats \ 1 reply \ @_stacktoshi 21 May

Terrible for whom?

I'm not in favor (although I do hold some bitcoin ETF in my retirement account) and no one here would touch an ETH ETF with a 10 foot pole, but who's to say that it's not better than most of the zombie s&p 500 and that it could rightfully reallocate capital from them, and then when those companies finally eat dirt, new capital could be allocated towards something healthy & stable like bitcoin & its infrastructure? Baby steps forward and backward for mass market adoption should be expected at least.

0 sats \ 0 replies \ @DiedOnTitan 22 May

It's terrible for Bitcoin by association. It's already difficult enough to separate Bitcoin from "crypto", and an Ethereum ETF makes that separation even more difficult in the minds of those who may hold both. When Ethereum tanks, not if, it will likely cause at least a partial liquidation of the Bitcoin ETF by association massively increasing volatility.