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Bitcoin Futures-Based ETF Likely To Be Approved in the US (thestreet.com) 59

The race is on: who will be the first to launch a Bitcoin exchange-traded fund in the United States? From a report, shared by a reader: In Europe, there is already a Bitcoin exchange traded note (ETN) available to investors. In the U.S., it is widely anticipated a Bitcoin ETF will be be approved by the U.S. Securities and Exchange Commission (SEC) very soon. In Europe, ETNs are designed to track the movement of Bitcoin against the U.S. dollar. The ETNs are Bitcoin Tracker One, which is traded in Swedish krona and Bitcoin Tracker EURO, which is traded in euro. Both ETNs are issued by XBT Provider AB and traded on Nasdaq OMX (Stockholm). Dave Nadig, CEO of ETF.com and previously the director of ETFs at FactSet Research Systemsm believes we can expect to see Bitcoin Futures-based ETF launched in the U.S. by the end of this year. "Yes, you can already trade a derivative in Europe, an exchange traded note which tracks Bitcoin," Nadig adds. "Then the race in the U.S. is the race to see what gets approval first. Will it be a Bitcoin future or a straight up Bitcoin holding ETF? My bet is that we will see Bitcoin futures approved fairly quickly."
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Bitcoin Futures-Based ETF Likely To Be Approved in the US

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  • Maybe I'm missing something, but if you start doing anything that eventually returns to a traditional fiat currency, aren't you going to have issues of speed of transaction, or quantity of transactions (people will try to game things as much as possible, mass quantities of exchanges, automation, etc). Will that be an issue with blockchain currencies? Can it keep up?

    • by lgw ( 121541 ) on Thursday September 21, 2017 @01:52PM (#55239557) Journal

      This will actually be a plus for the woefully slow blockchain, as it allows speculators to move to real markets: an ETF will be far easier to trade than actual bitcoin, just as currency futures are mush easier to trade than schlepping physical currency around. The ETF can trade many times per day (or per second) without the underlying bitcoin changing owners.

      But it's also the beginning of the "BTC money supply" becoming disconnected from the amount of issued BTC. Once we start seeing BTC-denominated savings accounts and currency derivative swaps, the BTC money supply will be many times larger than the actual issued BTC, and BTC will see many of the same behaviors as "fiat currency". Just as fixing the supply of physical USD currency would mean almost nothing to inflation or the USD money supply, the fact that the issued BTC will son become fixed will mean almost nothing. Welcome to modern finance.

      Did you know there the total value of currency and credit derivatives is now half a quadrillion dollars? People worried about the Fed's control of the money supply are only seeing one tree in the forest. Currency derivatives for BTC already exist - what fun.

      • Seems like all of this just opens things up to even greater levels of gaming... If it works like it has for Silver (in my humble opinion), then it will bring the price down for BTC. If you can short it in some way, then the path to fortunes will be made. ;-)

        • by lgw ( 121541 )

          Seems like all of this just opens things up to even greater levels of gaming...

          Yes, indeed. But the real commodities markets have been gamed for around 400 years now by some of the smartest people who have ever lived, and the markets have firm protections with sharp legal teeth for all but the most recent of those "exploits". The BTC exchanges have no such protection, as should be obvious by now.

        • Seems like all of this just opens things up to even greater levels of gaming...

          Currencies will collapse. IMO Bitcoin was created to crash national economies, by a national actor.

          • Are you thinking that a national actor will attack the block chain servers after wide adoption? Your comment is interesting, but I don't see a trivial fashion to selectively 'turn off' bitcoin for a specific target country. A national actor could create some interesting problems for validating the BC. Please expound.
          • by lgw ( 121541 )

            I'm also confused about the scenario you're proposing. Say more? Are you envisioning BTC being more, or less stable than existing national currencies? Or first the one, then the other?

  • Bitcoin Futures-Based ETF Likely To Be Approved in the US

    One word: Buy!

  • by Bruce Perens ( 3872 ) <bruce@perens.com> on Thursday September 21, 2017 @02:07PM (#55239639) Homepage Journal

    Bitcoin is a demonstration of the absurdity of fiat currency, taken to excess. Its basis is already-performed work on a computer to come up with a number based on previously-computed numbers. The numbers generated have no practical value except in reference to each other.

    Some people are, absurdly, willing to exchange such numbers for things of real value. But this odd behavior is far from guaranteed to persist.

    Similarly US dollars are based upon the faith in, and credit of, the government of the United States. Said government currently has a head of state who engages in behavior that does not inspire faith, and repeatedly threatens to renege on agreements - thus not providing any operational basis for credit.

    All of this points toward a time in the future at which confidence in currency that does not represent real value will collapse as confidence in it erodes.

    A valid currency would be one that has a non-negotiable value based on provision of food and shelter, these being things essential to human welfare that can not be changed into data or made from data.

    All other currencies are fictional things. That people have faith in them today does not mean they will tomorrow.

    • All of this points toward a time in the future at which confidence in currency that does not represent real value will collapse as confidence in it erodes.

      That should say "All of this points toward a time in the future at which currency that does not represent real value will collapse as confidence in it erodes.

    • by JcMorin ( 930466 ) on Thursday September 21, 2017 @02:12PM (#55239691)
      Everything you said is true, it has no value, it's nothing but numbers and electron BUT you can't replicate it, you can transfer it and it's limited... those are good characteristics for using it as money. Some people like the idea you can send any amount you want anywhere on the planet. Bitcoin is an experimental currency that has predicted inflation, against USD and EURO where they race to print as much money as they can... the bets are pretty good IMO.
      • While bitcoin implements an internal limit on the creation of more bitcoins, that limit does not control the creation of alternative cryptocurrencies to bitcoin. So, you get the same effect as that of nations rushing to print more national currency.
        • Having the another country printing is own fiat currency does not really affect the price of the USD. There is 873 ish alt-coin (https://coinmarketcap.com/currencies/views/filter-non-mineable-and-premined/). Most of them are extremely illiquid thus do not have that real price. If I sell/buy for $5000 of the bottom half of those alt-coins you will see a huge price change. Each of them competes against them with different ideas and strategy. Most will fail, some may discover a better solution. The fact anothe
          • Having the another country printing is own fiat currency does not really affect the price of the USD.

            But in that case, they are other countries. Cryptocurrencies in contrast are linked to no particular nation. There are a number of alternative cryptocurrencies that are currently somewhat liquid, such as Ethereum, Bitcoin Cash, Ripple and Litecoin.

          • I agree that the value of shelter and food is different in different places, but that is a matter of definition. Regarding who would provide it, it has naturally so far been nations that back their currencies. Although this has fallen out of fashion. After nations, there are international organizations such as the EU.

            Although a health-and-welfare based currency has its issues, surely they are not greater issues than a fiat cryptocurrency. Basing on a variable and somewhat problematic thing of value beats ba

      • by Xyrus ( 755017 )

        And with no central governing authority nor protections, bitcoin behaves just like the gold backed currencies of yore on steroids (and those days sucked).

        Sorry, but I prefer stable currencies that have at least some form of regulation and protection. I don't like currencies that swing between worthless and hoard. I also don't like currencies that can vanish from wherever and have absolutely no legal recourse. Been there, done that.

    • I agree with you on the problems with fiat currency. However, I think you could make an argument that the value of Bitcoin in particular is the integrity of the blockchain and the wide-spread usage of it's clients. As tokens of authenticity, they do have some value.

      I think the underlying issue with Bitcoin is that it isn't easy to nail down as any one particular thing. It has some properties of a currency and can be used as one, but it really isn't a currency in the traditional sense. It's kind of like a ne

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Money is an invention and Bitcoin is the best private money so far. You are advocating abandoning money and returning to barter? You can not commoditize shelter or food. That is not money. If you call for gold then - yes, gold is one sort of good money. Gold & Bitcoin are both good. Rai stones - not anymore. Bitcoin is still young... look at the volatility and tiny marketcap. This will change in coming years and you will use it too in a decade or so even if you don't know about it. Bitcoin and other cry

      • Food and shelter in a particular place, with particular limits, are indeed a commodity. Futures of food and real estate are traded.

        Interesting that you should cite the stock market, and particularly in tech companies. This is driven more by hysteria than anything else.

      • by Lennie ( 16154 )

        Gold hardly has any real value either. It's just like everything else. Whatever people are willing to trade for it.

  • Bitcoin (Score:4, Insightful)

    by dicobalt ( 1536225 ) on Thursday September 21, 2017 @02:40PM (#55239845)
    The currency of choice for anarchists and Ferengi weapons traders.
  • My understanding in reading this article is that the SEC will want to identify people who attempt to exchange bitcoin for paper currency. This makes pretty good sense from a government perspective since the real threat of bitcoin is it's ability to transfer money anonymously and avoid regulation. However, in doing so it undermines the foundation in which bitcoin was created which is to allow for anonymous transactions with no regulatory oversight or central authority. I would imagine that people using bitc

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