ETFs Won’t Be Approved + Low Volatility Due to Bitcoin Manipulation / Wash Trading
This article was prompted by another article that was posted in the cryptosphere recently (within the last couple of hours from the time of writing actually).
The only reason why this was done is because the article that was posted was so grossly inaccurate, that it all but mandated a response to clear up the inaccuracies laden within in order to give users the ‘bigger picture’ of what’s really occurring in the markets.
False Narratives Being Published
The article in question that mandated the response was posted by Ethereumworldnews.
Below, is the news article, posted in full:
_Finally, after days of mundane, sideways price action, the cryptocurrency market saw some long-awaited movement on…_ethereumworldnews.com
Since there are so many egregious errors in general accuracy and truthfulness within this article, we’ll go ahead and take the time now to dissect them one by one.
Inaccuracy #1 — “ETF Approval to Send Crypto Flying”
We have thoroughly established at several different points that the ETFs (Exchange Traded Funds) for Bitcoin and crypto that were submitted for approval by the SEC would more than likely not be approved.
“But, on the other side of the coin, if regulators were to approve such a vehicle [ETFs], the Element traders [?] added that this may signal mass adoption and would bring Bitcoin out of its slumber.”
There are a few problems with that entire quote, namely:
- The SEC will not approve the Bitcoin ETFs for all of the reasons stated in this analytical research piece I wrote earlier — https://medium.com/@proofofresearch/sec-rejects-multiple-etfs-a-thorough-breakdown-on-why-etfs-will-never-be-accepted-9e91a50de94b
- If regulators were to somehow lose their minds (even entertaining the idea feels stupid at this point) and approve a Bitcoin ETF, it would not signal “mass adoption”. Mass adoption signals mass adoption. And mass adoption is something that you realize after its happened. There was no ‘point’ when the cell phone reached ‘mass adoption’, we just knew when it happened. Similarly, that’s how things will be for Bitcoin if and when mass adoption for the technology occurs.
- “…Would bring Bitcoin out of its slumber”, implies that the ETFs (which, once again, are NOT going to be passed), would somehow grant access to investors that did not previously have access to Bitcoin. This entire idea that investors seek access to Bitcoin in a format where they are not exposed to the actual volatility of the coin is stupid because, ETFs by definition, mandate that investors are exposed to its underlying volatility and risk. That’s what makes it an ETF. And, generally, ETFs are composed of funds unless we’re talking about a specific asset like gold and, in Bitcoin’s case, it has not reached that status yet in the eyes of the mainstream. In fact, chances are, Bitcoin isn’t even seen as legitimate yet in the eyes of most lay persons (those that are not super familiar with cryptocurrency and have only just heard of the concept of Bitcoin).
Another problematic assertion that is made in the article implies that Bitcoin’s volatility has been reduced due to ‘lack of investor interest’.
Not only could this statement not be more false, it also belies a fundamental misunderstanding in how markets work at their core.
Volatility does not stem from whether investors are interested or not; it stems from indecisiveness. Now, there are times where indecisiveness can lead to a stagnation in the markets, but the lowered volatility that Bitcoin has experienced in recent days and weeks has been due to pure market manipualtion.
In fact, the manipulation is so blatant and rampant at this point, that it can be spotted via this tweet,
In the tweet posted above, a trader makes the observation that the price of Bitcoin is being held stagnant by what appears to be a bot script gone haywire. Or perhaps Binance themselves have been initiating such a bot and simply lost control of its script.
In either case, this is never a positive thing and certainly does not reflect a ‘lack of interest’ into the markets. This type of activity on major exchanges (Binance is #1 at the time of writing in crypto volume; Source: CMC ) provides another major reason for why the SEC is nowhere close to approving ETF applications.
The primary point of this article is to warn investors that they need to be careful about what sources of information they use for their news and why.
Ethereumworldnews is known for doling out inaccurate, poorly researched information all for the sake of being able to say that they were ‘first’ or that they at least covered it. And, as a journalist, I get it.
However, one thing that is in our power and responsibility to do is to never compromise journalistic integrity for the sake of a few additional clicks on an article.