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Bitcoin Exchange-Traded Products: Will the SEC Approve a Bitcoin ETF This Year?

The prospect of a Bitcoin ETF has been widely discussed for the last few years, and despite all previous applications for a US-based fund being rejected or withdrawn, the latest rhetoric from the SEC appears to suggest the commission is ready to consult with industry stakeholders, who may be able to address their concerns such that a viable Bitcoin ETF can finally come to fruition in 2018.

The final quarter of 2017 saw the introduction of regulated Bitcoin futures products, via both the CME Group and Cboe Global Markets in the US, representing an increasing normalisation of Bitcoin as an asset within the framework of traditional finance, and an important new vector for fund providers to use in crafting a Bitcoin ETF. The Bitcoin futures contracts have now been trading for a number of months, and their early successes may have encouraged the latest dialogue from the SEC and the release of a document last month in which they have extended the consultation period of formal proceedings for a rule change to allow the NYSE to list Proshares Bitcoin ETFs. This appears to be in direct contrast to a staff letter penned by Director of the Division of Investment Management Dalia Blass at the SEC in January, which seemed to downplay the chances of an ETF being approved in 2018, citing “a number of significant investor protection issues that need to be examined before sponsors begin offering these funds to retail investors”.

The formal consultation process which was initially started at the end of 2017, is essentially a request for industry stakeholders to provide comments to address the handful of points of contention over Bitcoin ETFs, specifically regarding fair valuation, sufficient liquidity, effective pricing arbitrage and asset custody. These are reasonable considerations that have ultimately been the root cause of the stream of rejected and withdrawn Bitcoin ETP applications over the years. The document in March has been followed by further dialogue across April relating to similar ETF applications requiring rule changes, including a document released on April 23rd to extend the consultation period for similar proceedings related to both long and short leveraged Direxion Bitcoin ETFs.

Bitcoin is an asset which is unlike the vast majority of those the financial system is accustomed to engaging with, and has been treated with a tentative approach within traditional finance and banking circles. However, a response letter from Cboe president Chris Concannon, covers many of the concerns related to a Bitcoin ETF and points towards the growing maturity of the Bitcoin marketplace to suggest that the SEC take a “holistic approach”, similar to how it has historically engaged with commodity-related ETPs.

The Cboe letter acknowledges the additional considerations required for Bitcoin and cryptocurrencies but encourages an approach which doesn’t unnecessarily impede innovation.  The document also points towards the growing maturity of the market, with the impressive “high-water marks” of December 2017, such as more than $5 billion in notional value of bitcoin transactions in a single day.

Applications for the Proshares Bitcoin ETF and Proshares Short Bitcoin ETF were originally filed in September 2017, but promptly withdrawn. Despite this, the latest document from the SEC appears to suggest that these proposals are now back on the table. The proposed Proshares ETFs and those presented by Direxion, would offer both long and short funds with exposure to Bitcoin returns using the cash-settled bitcoin futures contracts that are now available. This introduces potential liquidity problems due to the fact that the regulated futures contracts are yet to attract significant trading volumes. However, as stated in the CBOE letter:


Vodafone Promotes Bitcoin [BTC] Advertisement on Facebook

German advert debuted on the company’s Facebook page on Feb. 17th

On 21st February, a Redditor posted an on r/cryptocurrency, a screenshot of an ad on Bitcoin promoted by Vodafone on Facebook in Germany. With the caption, “German Vodafone ad I saw today”.

Here’s a copy of the same:

The image reads, “Was soll Dir Oma zustecken, wen inn Zukunft alle mit dem Smartphone bezahlen?” 
Which translates to, “What should grandma gift you, when everyone is paying with their phones in the future?”
And the caption reads, “Gibt’s bald Bitcoins statt Tasgengeld” 
Translating, “Will there soon be Bitcoin instead of pocket money?”

To unfold a couple of things, this basically means that the German Vodafone is crypto-friendly. Despite the exit from the Libra association, Vodafone supports cryptocurrency or safe to say, Bitcoin. After things went south with Facebook’s Libra coin, many MNCs started leaving their newly found association. With Paypal, Visa, Mastercard leaving the game, many more were influenced. In Jan 2020, Britain’s Vodafone Group PLC released an official statement, stating that they left the entity that manages the Facebook Inc led an effort to launch Libra coin.

“We will continue to monitor the development of the Libra Association and do not rule out the possibility of future co-operation,” said a Vodafone spokesman. 

Although Vodafone is making the move to direct its resources and attention to M-Pesa, its own digital payments service, it has found ways to keep the crypto alive for its users. 

Additionally, it’s important to note that Facebook allows Bitcoin ads in Germany. From 2020, laws regarding cryptocurrencies were put to effect in Germany. The law requires digital asset custodians to be licensed. Every company that keeps the custody of crypto and targets German clients needs to claim it to Germany’s Financial Supervisory Authority [BaFin] with its intention to get a license.

Advertisements on Bitcoin were allowed due to the country’s friendly policies on cryptocurrencies. A sign of how some countries do not feel threatened by digital assets and their legitimate use cases. 

Recently, Boerse Stuttgart –  the second-largest stock exchange in Germany, ninth-largest in Europe obtained a provisional license from BaFin.The stock exchange is preparing to offer crypto custody services to institutional investors. Blocknox, a subsidiary of Boerse Stuttgart Digital Ventures, takes care of the custody of cryptocurrencies on an escrow basis.

With Bitcoin running in the current apparent Bullrun, more and more regulations are coming inline. 

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Bears Continue To Gain Momentum In Bitcoin – Are We About To Collapse?

  • Bitcoin saw a 6% price fall over the past week, bringing the price of the coin down to $9,613.
  • It is finding support at the short term .382 Fibonacci Retracement level, however, it certainly looks like the momentum is on the side of the bears at this moment in time.

Bitcoin has been falling ever since meeting resistance at the $10,400 level this past week. During the week, tt found support at around $9,600, however, it was unable to overcome the resistance at $10,190, causing it to drop and fall once again.

Things are now looking troublesome for Bitcoin after not being able to make any movement higher over the past few days. Despite all the latest price falls, Bitcoin remains up by a total of 11% over the past 30-days of trading.

Bitcoin Price Analysis


BTC/USD – DAILY – Source: TradingView

Market Overview

Taking a look at the daily chart above, we can see that Bitcoin has found support at the .382 Fib Retracement, priced at $9,569. During the week, it made a rebound and broke above the $10,000 level again, however, it was unable to break above $10,190 (previous 1.414 Fib Extension) which caused it to reverse and rollover.

Short term prediction: BULLISH

The cryptocurrency remains bullish, however, it is very close to becoming neutral. If it drops beneath the $9,000 level, we can consider the market as neutral. It would need to drop beneath $8,200 before we could consider it to be in danger of turning bearish.

Toward the downside, if the sellers break beneath $9,569 the next level of support lies at $9,311 (.5 Fib Retracement). Beneath this, support lies at $9,159 (downside 1.272 Fib Extension), $9,053 (.618 Fib Retracement), and $9,000.

On the other hand, if the buyers rebound here and push higher, resistance lies at $9,815 and $10,000. Above this, additional resistance lies at $10,190 (1.414 Fib Extension), $10,474 (1.618 Fib Extension) and $10,500.

The RSI dipped beneath the 50 level and remained there for the longest period during 2020. If the RSI is unable to climb back above 50 pretty soon, we can expect the moment to shift and for the bears to regain control.

Key Levels

Support: $9,569, $9,311, $9,280, $9,200, $9,169, $9,053, $9,000.

Resistance: $9,637, $9,615, $9,815, $10,000, $10,190, $10,360, $10,474.

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Bitcoin (BTC/USD) forecast and analysis on February 22, 2020

Cryptocurrency Bitcoin (BTC/USD) is trading at 9746. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bearish trend on Bitcoin. At the moment, cryptocurrency quotes are moving near the middle border of the Bollinger Bands indicator stripes.

Bitcoin (BTC/USD) forecast and analysis on February 22, 2020

As part of the Bitcoin exchange rate forecast, a test of the level of 9910 is expected. Where can we expect an attempt to continue the fall of BTC/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 9180. The conservative area for Bitcoin sales is located near the upper border of the Bollinger Bands indicator strip at the level of 10300.

Bitcoin (BTC/USD) forecast and analysis on February 22, 2020

Cancellation of the option to continue the depreciation of Bitcoin will be a breakdown of the upper border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair above the area of ​​10320. This will indicate a change in the current trend in favor of the bullish for BTC/USD. In the event of a breakdown of the lower border of the Bollinger Bands indicator bands, we should expect an acceleration in the fall of cryptocurrency.

Bitcoin (BTC/USD) forecast and analysis on February 22, 2020 implies a test level of 9910. Further, it is expected to continue falling to the area below the level of 9180. The conservative sales area is near the area of ​​10300. The breakdown of the cryptocurrency fall option will be the breakdown of the level of 10320. In this case, we should expect further growth.

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