According to Investopedia, an ETF is ‘An exchange-traded fund (ETF) is a type of security that involves a collection of securities—such as stocks—that often tracks an underlying index, although they can invest in any number of industry sectors or use various strategies’
There was a lot of hype for Bitcoin ETFs in the crypto market, however, pretty much all proposals were shut down by the SEC due to concerns surrounding volatility, manipulation and other requirements of the Exchange Act Section 6(b)(5).
ETFs are now pretty much a myth and the hype is over, however, Bitwise still wants its Bitcoin ETF ‘at all costs’ and has written a letter to the SEC. The letter stated that Bitwise would try to meet all the requirements, most notably, the prevention of fraudulent and manipulative acts and practices.
According to Bitwise, ‘the Bitcoin market is uniquely resistant to market manipulation and the listing exchange has entered into a surveillance sharing agreement with a regulated market of significant size.’
Does Bitwise Have a Chance and Does it Matter?
According to Bitwise itself, a Bitcoin ETF is absolutely necessary ‘Because a large number of U.S. investors are today investing in bitcoin,
and the question of whether they are able to access the market safely and efficiently, and with the protections offered by the federal securities laws, is critical.’
While that might be true, the letter sent to the SEC doesn’t really address how Bitwise would prevent manipulation. The letter states that Bitcoin’s market is resistant to manipulation but that doesn’t seem to be the case as a lot of trading volume is fake and someone with large amounts of Bitcoin could easily manipulate the market.
In fact, an attacker wouldn’t even need Bitcoin in order to manipulate the market as FUD is enough for Bitcoin’s price to crumble.