Bitcoin hearings
As I write to you today, I'm listening to the three-hour stream of the confirmation hearing for Gary Gensler, who has been nominated to chair the U.S. Securities and Exchange Commission.
It's extremely doubtful that I'll get through the entire thing, and even though these events are usually a snooze-fest, this one has a lot of very important information about how Gensler, if confirmed, will approach the regulation of financial markets and digital assets.
Meanwhile, last night, The Chicago Board Options Exchange made its latest attempt to obtain approval for the first bitcoin exchange-traded fund to be available on a U.S. exchange.
As we know, Jay Clayton, former chair of the SEC, was vehemently opposed to such a vehicle, saying that the market simply wasn't ready. The SEC went on to deny about half a dozen such filings.
Parsing Gensler's statements today, it certainly seems that he'll give it a more serious consideration than Clayton did.
If we can learn from Canada, where the world's first bitcoin ETF was just launched to much fanfare and explosive volumes, it's quite clear that the market is certainly ready for such a product.
Back in March of 2017, when the Winklevoss twins made the first attempt at a bitcoin-backed ETF, the market was wondering whether approving one of these funds, which would allow investors to purchase bitcoin without incurring the security issues of holding coins, or deal with the regulatory uncertainty of buying from an exchange, would be a catalyst for hedge funds to start making purchases.
Today, however, we're not lacking any particular catalyst. Hedge funds are already buying. Bitcoin does not need any catalyst. As Gensler pointed out in his hearing, bitcoin is the catalyst.
Frankly, I'm not sure what an ETF really adds at this point. It's only a matter of market share and who gets to rake in the fees for selling bitcoin to Wall Street. That's not a race that most of us have any horse in, unfortunately, but it's still fun to watch.
Please note that I will not write be writing a daily newsletter tomorrow, both because it's my birthday, and because I'm getting a tooth pulled. We will see you all on Thursday.
Best regards,
