What They're NOT Telling You About The Bitcoin ETF!

As the market continued to dig a deeper hole today it sold off 20 billion and established a new yearly low we are now equivalent in total market cap to November 15 2017. Interestingly Bitcoin had nearly the same market dominance then as it does today was truly amazing. Here is that the market is operating on fear based off of nothing. As nothing has appened for those unaware the Vanek solid x etf proposal was delayed by the SEC few days back leading to 30 billion being sold off. The key word there is delayed not denied they have delayed other etf applications as well. Why this one hurts so badly is that the market did a great job of convincing itself that we are going to see an approval in august. Despite what the rational voices have been saying so rather than speculating let's get empirical and discuss rationally about what is going to happen so we're smarter and less emotional than this clearly oversold market.

So before we go any further I think we should first have a common understanding about the different ETF applications on the table currently first we have:

ProShares ETF

• First update: Tue Jan 30 (+35 days)
• Second update: Fri Mar 23 (+87 days)
• Third update: Fri Jun 15 (+171 days)
• Final deadline: Aug 23 (+240 days)

Direxion ETF

• Notice originally posted on January 24
• First extension issued on March 1 (-45 days later)
• Second extension issued on April 23 (-45 days later)
• Third extension issued on July 24 (90 days later)
• Final deadline is September 21 (-60 days later)

CBOE VanEck/ Solidx ETF

• Filed July 9th
• First deadline 16 Aug
• First extension issued on 7 Aug
• Second deadline Sept 30
• Final deadline 21(?) - 27 ) Feb 2019

Bitwise Hold 10 Cryptocurrency Index Fund

• Filed on July 24th
• First deadline is Sept 7

So if you'll notice the pattern the timing of the ETF approval process generally follows a standard formula

1. The ETF files a "proposed rule change" with the SEC

2. The SEC posts notice of the 'filing in the Federal Register and solicits comments

3. The SEC has 45 days from posting to approve or deny the ETF

• 45 more days if a longer period is appropriate
• 90 more days for the ETF to address grounds for disapproval
• 60 more days if again a longer period is appropriate

This means the real deadline for the SEC to approve or deny an ETF is 240 days. After files notice in the Federal Register or 45 + 45 + 90 + 60 because of how the law works the SEC can't just set a 240 day deadline as the initial span of time for consideration. It has to do these extensions one at a time so for example last month we saw the Direxion ETF given its third and final extension allowed by law. This means we'll likely see another 2 ETFs denied or approved within the coming month. proShares with its deadline on August 23rd and Direxion with its final deadline as September 21st will be decided by those dates. Now the thing to mention is that these are different things than the CBOE Vanek solidx etf. Unlike that etf the Direxion ETF and proShares ETFs are not commodity backed. In other words these funds won't involve buying actual Bitcoin instead being based off futures. Hence they're not expected to have as much impact on bitcoins price as the Vanek's solidX Bitcoin ETF. When the direction ETF was delayed last month it barely affected the market but last days delay of the commodity back etf sent the market into an existential crisis. The markets expectation is that a commodity backed ETF would significantly impact spot price futures back ETF like pro shares or Direxion won't still how the SEC handles features back to ETFs.

So let's talk about the veneks solid X ETF and what most people aren't talking about after all the Vanek solid x ETF the market cares so much about is merely a copy of a previous application that was denied there was another solid X ETF
proposal that was denied on March 29th 2017 now of course people are going to respond that this time things are different this time the ETF proposal has some things going for it that the previous one didn't let's cover those things

This is why this time things are different

1. It is the CBOE. Respected by the SEC more
2. The assets will be insured
3. Some of the main markets (US, Japan, Korea, China) have made big steps in clarifying the regulatory situation for Bitcoin
4. The CBOE doesn't apply for licenses that it doesn't expect to obtain. I would assumes that discussions were held with the SEC before even applying
5. There are professional grade custodial services available now (which the ETF will leverage) these were not available last time
6. The presence of an insurance and custodial market shows how the space is maturing

This is what different this time for Solidx

1. Obviously instead of NYSE Arca, they'll now try to be listed on CBOE BZX
2. VanEck (major ETF issuer) is a "marketing partner (VanEck gets some money so SolidX can use VanEck's name on the shares
3. The amendments have some paragraphs added about regulations in different countries. Specifically the fact that the CFTC allowed the Bitcoin futures
4. Before they would have used a "XBX spot prize (based on exchanges) but now the "MVIS Bitcoin OTC Index ("MVBTCO) This index doesn't actually exist yet
5. Just in general, there is more emphasis on OTC markets. The Trust d will do most of it's trading with the OTC platforms that will be in the MVIS Index

the OTC markets the trust will do most of its trading with the OTC platforms that will be in the NBI s index but they might also use bitstamp, GDX, gemini, bitflier and Kraken too. now of course these concerns could be somewhat alleviated before February of 2019. when I think the final deadline will be but I think it should be clear that the market is putting far too much faith and hope in this clearly flawed ETF application obviously the biggest change respective to this application over the previous version is that Vanek's name is on it and the CBOE is behind it as well but in terms of the changes themselves.

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