The US Securities Commission (SEC) has published a memorandum on the latest meeting on November 28 in connection with the ETF bid. The request was originally commissioned by the US investment firm VanEck and software software and financial services from SolidX.
According to the Memorandum, representatives of VanEck and SolidX and the Chicago Board Options Exchange (CBOE) met with DIP members of the Corporate Finance Department, the Trading and Market Department, the Economic Analysis and Risk Department and the General Attorney's Office 26 November.
As previously reported, in June 2018, VanEck joined SolidX and requested that the physically supported Bitcoin ETF be included in the BZX Equities Exchange CBOE: Approval or Disapproval is still in progress since the SEC deferred its decision in August .
At the center of the argumentation, Bitcoin was compared to goods from more traditional means – crude oil, silver and gold – all of which already have an ETF on the market.
In the analysis of price formation on traditional goods with Bitcoin, the team claimed that "[s]similar to gold and silver, Bitcoin gets its value as "substitute money" (unlike crude oil, which is "pure industrial goods").
The presentation emphasized that "empirical evidence" in all three traditional futures markets shows that "spot and futures prices are cointegrated", meaning they are "closely linked". Same, as per presentation, refers to Bitcoin spot and futures, and this form – for all goods at hand – "proof of a well-functioning capital market".
In the second central argument, the VanEck-SolidX team claimed that Bitcoin is more resistant to manipulating the market than traditional partners with approved ETFs.
In the case of physical goods, the team said that they could use "internal data", such as "discovering new sources of supply" or "significant disturbances" at production sites. For Bitcoin, these situations are "non-applicable" to the applicants.
Among other examples of Bitcoin's "elasticity" of manipulation, the presentation included the lack of "strong concentration of funds on any Bitcoin exchange or OTC platform" since "[a]rbitrageurs must have funds allocated to multiple trading platforms to take advantage of temporary pricing. "
Moreover, "the process of arbitration also has advantages in Bitcoin compared to other products, such as oil, since Bitcoin's homogeneity is a unique world market, not regional semi-independent markets resulting in dysfunctionality and fragmentation of the market."
As announced earlier this week, VanEck has just announced its partnership with the world's second largest stock exchange company Nasdaq to jointly launch a set of "transparent, regulated and supervised" digital assets, starting with Bitcoin's Future Contracts, 2019.