The SEC rejects 9 crypto-based ETFs: a necessary reality check

On August 22, the SEC (Securities and Exchange Commission) rejected 9 applications by ETFs related to bitcoin and ethereum, as submitted by ProShares, Direxion and GraniteShares.

Therefore, at present, the following ETF approval requests remain on SEC’s table:

– September 7: request by Bitwise

            – September 30: request from CBOE VanEck/SolidX

More specifically, VanEck’s request differs because the proposed ETF has a very high limit price for a single unit (200,000 USD), so it is clearly a product intended only for institutional investors such as mutual funds and hedge funds.

This, according to some, would make it more welcome to the SEC, increasing the likelihood of its approval.

In any case, it is clear that this move by the SEC will still make for a lateral/bearish market at least until the end of September.

However, before you tear your hair and draw any negative conclusions, I invite you to re-read the article that we published immediately before this one.

In that article we gave a factual description of the current cryptocurrency market, which contrasts with what might appear when reading the media.

While for magazines the approval by the SEC and everything revolving around the relationship between cryptocurrencies and traditional finance seems to have a capital importance, when we look – all things considered – at where the capital actually invested comes from, we’ll realize that it is instead the Chinese market and in general the entire non-institutional retail market that revolves around exchanges such as Binance, Okex, Huobi and more…

The numbers do not lie.

In that report we provided CoinMarketcap’s chart, showing a huge gap in terms of invested capital between Coinbase (the world leader in traditional finance exchanges) and “independent” exchanges:

Today, certainly because of the SEC decision, that gap has increased.

The research shows this, estimating that in 2018 Coinbase lost 85% of its transaction volumes, while the weighted loss suffered by Coinbase and Kraken put together amounts to 70%.

In the same period of time, according to the same research, the Chinese exchanges, which are independent from the great finance, have increased their volumes by 50%.

This relentless “reality check” makes us realize how the media hype around bitcoin ETFs and all other topics related to institutional finance is superficial, and how it overestimates the matter.

It is now more and more clear that the establishment does not intend to enter the cryptocurrency world, at least in the medium term, but at the same time is trying to influence this industry by creating expectations concerning this same entrance and continuously postponing it.

Thanks to the use of the media, corporate capital is able to influence the markets even though it has invested very little capital in them and is therefore not a major player in practical terms.

The trick is very old and has “illustrious” historical precedents, as we explained in a recent article.

We are therefore in a complex situation.

The establishment, especially in the United States, is taking total control of the social side of the Internet, which accounts for 70% of global communication (the rest is dominated by television, which in turn is already firmly in the hands of the ruling powers), so it will be increasingly difficult to make the masses understand the real situation of the market.

At the same time, events in Venezuela, Iran and Turkey, as well as the precarious economic situation in China, along with currency wars and the lacerating power struggle between the White House and Congress in the USA, these all create an unfavourable scenario for the affirmation of cryptos in corporate finance.

I too, if I were the head of any US institution, would not dream of letting digital currencies have free rein that could be used by my enemy or that could lead to geopolitical imbalances.

Therefore, we must resign ourselves to the fact that neither the media nor the financial establishment will be, at least in the medium term, a determining factor for the triggering of an upward trend in cryptocurrencies… if anything, they will be a restraining factor.

This does not mean, however, that there is no possibility of seeing a reversal of the current lateral-bearish trend in the medium term.

Such a reversal would, for the moment, be entirely in the hands of the retail market, that is, of individual investors, and of the capacity of retail exchanges to manipulate their platforms upwards.

Which elements could influence these two factors?

Individual investors: In the previously quoted article, we indicated the de-evaluation of the Yuan as a possible trigger for Chinese investors. In the same way, de-evaluations of other currencies would cause runs on crypto purchases in the countries involved (as is now the case in Venezuela and Turkey). However, there are many other less predictable elements, related to people’s economic conditions, their financial freedom and the progressive deterioration of the financial services they enjoy in their daily lives (in a future article we will talk about some surprising links between  cryptos and the situation of citizens in China and Turkey).

Upward manipulation: Until now, companies that in recent years have created new cryptocurrencies have had to offset their financial statements against the sales of their assets. This factor, combined with the increased controls to which the exchanges are subjected, has not pushed us to carry out the spectacular upward manipulations to which we had become accustomed. However, I am quite sure that when it becomes necessary, manipulation will still be possible, again for reasons that we are not able to predict today.

The situation therefore requires patience and time.

The cryptocurrency market is too greedy for it to be allowed to languish for too long.

Sooner or later something will happen that will get the carousel moving again.

Since cryptos were born, we have already experienced 4 main bubbles and several, strong, minor rises:

– 2010: from $2 to $32 (+ 94%)

– from $70 to $230 (+ 70%)

– 2013: from $173 to $1200 (+ 85%)

– 2017: from $5800 to $20,000 (+ 71%)

The year 2018, which follows the last bubble in this list and therefore presents apparently stagnating and depressed prices, is now the best time to enter the market at very convenient prices and therefore prepare to achieve high profits in the coming bubble.

It is true that many investors are not yet familiar with this market, but they should not give up on the returns that could result from it.

The stakes are so high that it is worth using this time-out in the market to make an effort to “upgrade”, so as to have all the necessary tools not to miss the next opportunities that, once lost, will hardly reappear in the course of a single life.

Institutional investors in traditional finance are also taking advantage of this season’s low prices to hoard on cryptocurrencies.

In this article we have described how this is happening right now in cryptocurrencies, also explaining that, since the dawn of the industrial revolution, this is the strategy used by financial “sharks”: manipulating prices downwards to buy at affordable prices the most valuable assets in a market.

And in order to face the long periods of stagnation of the market itself, we have recruited some new consultants who now manage a faster trading service that takes advantage of the rebounds of some “altcoin” which have been carefully selected to make profits even when the mass of investors can not earn anything (for example, we closed a trade at the end of July for LOOM and Cardano that has yielded us 50% and 20%, respectively).

This new service is called “BlockchainTop Income Intelligence” and features 5 coins in its portfolio that you can buy today at even better prices than they had when we first listed them:

Thanks to the constant yields obtained in the rebounds that always happen during the phases of stagnation, Income Intelligence will allow you to wait calmly for the next bullish phase of this industry (which some predict to be at the end of 2018 or mid-2019), continuing to achieve a sufficient level of profits even in the middle of this bearish phase of the market.

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Here’s to your prosperity!

The team at BlockchainTop

P.S.: Remember: even if the crypto market seems to be stagnating, the economic fundamentals of this industry tell a completely different story…

Users of large platforms are always growing, even though the market is now falling.

Bitcoin’s hashrate continues to increase, showing a steady capital investment in new hardware that will improve the speed and convenience of mining.

The big guns in traditional finance are preparing to take control when prices begin to rise.

All this would not happen, if big investors thought that the cryptos are no longer worth it!

Act like the big investors and try out Income Intelligence for a month using this special form.

CLICK HERE TO DISCOVER ALL OF INCOME INTELLIGENCE FEATURES.