SEC has not approved Bitcoin ETFs [fixed]
twitter.com
twitter.com
Edit: since the original tweet (https://twitter.com/SECGov/status/1744829327294837236) no longer exists, I've changed the URL to your link above.
A pump and dump would require the same entity to be doing the buying, pumping up, and then dumping the asset.
The SEC didn’t buy, nor did it sell, nor did it pump up the price (someone pretending to be the SEC pumped up the price).
Even assuming that the “largest pump and dump” claim is correct, at most, the SEC was used for that purpose and isn’t “responsible” for it.
Which may or may not be true, if they were using "password123" then sure that's negligent and they'd bear some of the responsibility, but it might not have been the SEC's fault at all.
It seems like SEC didn't even have some basic protections in place for their Twitter account, like having 2nd-factor enabled. That feels kind of negligent already, even if they had a very secure password.
How do we know it's not an inside job? Pretty tempting to pull a twitter account takeover and make potentially millions if you a lonely cog in the SEC wheel.
These guys hacked the SEC, made huge announcement tweet, and only got a 3% move from that. More over, they only had a 10 minute window to close whatever positions they had before BTC crashed through it's pre-hack price.
There is a fair chance that they actually lost money on this play, lol.
As you say though 10 mins is a small window, but they could have easily set a Conservative stop on doubling their money with only a 1% gain.
There was already some for radio/early news, but the landscape has changed so much, and it bothers me a ton that these platforms are being used.
1. The government owns it's own top level domain(s) to be a primary source
and
2. There is the general media who can turn that into stories, and use whatever private companies they need.
This delineates official statement from general news, which people will be slightly more skeptical of.
What kind of legislation? There's a whole lot of existing law that applies in that domain (both statute and Constitutional case law), but if you think we need different laws, it probably helps to at least present the general shape of the law you want rather than just that it should in some way touch impact government using private platforms for announcements.
After reading said announcement on Twitter, the first thing I’d do (if I cared about it) would be to head on over to sec.gov or use a search engine to find the official SEC site, then from navigate to find the official announcement. Any reputable news source should include a link in their announcement to the official announcement to save you this verification step.
At some point there may be so much targeted disinformation/misinformation out there that we need legislation to help protect against it but I don’t think we’re there yet.
Certainly you will admit at some size, responsibility and level of funding the organization should take responsibility for protecting itself from hacks. If the Department of Defense got hacked and nuclear secrets were leaked, I certainly hope people would get fired rather than sympathized with.
The DOD doesn't use Twitter, a social media platform, as the mechanism for launching nukes... what are you talking about?
more than that. all the alts went up too
If they have any reason to be concerned about the security of their account (and it looks like they should have at least from now on), they should arguably reconsider their choice of platform.
And if it's actually important, a third source from a trusted media outlet wouldn't hurt either.
Something big can happen and only a very little information can reveal it to have happened. That is the power of speed of information and the scale.
There have been many flash crashes in traditional markets bigger than that, triggered by similarly stupid events.
That's just as possible with regular stocks, which Twitter's owner has (unrelatedly) demonstrated multiple times in the past with both Tesla and Twitter... or, a bit slower, in the early covid months.
Stock markets are insanely sensitive to "insider" information and breaking news in general, which is why the regulations around them are so strict.
SEC twitter getting hacked is the last of scenarios I'd expect
Honestly I find it kind of suspicious but I could easily be missing something. I see multiple transactions spend more on fees than the amount exchanged in the transaction. A number of transactions looked enormous but turned out to be some form of washing. E.g address X sends $100MM worth of bitcoin to two addresses, with ~$1k going to address Y and the rest going right back to address X.
What’s the point? Why not just send $1k to address Y.
I originally started looking around to get a sense for how much bitcoin is being transacted relative to the block reward. As the halvings continue I can’t imagine how miners can profit without exorbitant transaction fees. Many of the transaction fees in the block I looked at were comparable to wire transfer fees.
Why would anybody want to use bitcoin outside of speculation after nearly all 21mm bitcoin are mined? Why would anybody want to continue mining as well?
You then end up with UTXOs that are each made up of a different amount of BTC and you keep grouping them in transactions and sending the leftovers back to yourself.
What you are likely looking at is not fraudulent and is a characteristic of bitcoin's UTXO design in almost every transaction that doesn't deplete a wallet. If it didn't send the remaining BTC to itself, it would be the "mining fee". So you see these transactions where you see the remaining change is sent back to the same wallet.
Bitcoin is based on the UTXO model, and requires the full amount of an input to be sent. For example, I might need to transact 20 bitcoin even if I only need to pay 1 bitcoin, with 19 bitcoin being transacted to a "change" address.
More by googling Bitcoin change addresses: e.g., https://support.blockchain.com/hc/en-us/articles/44170823927...
Bitcoin uses a UTXO model, a recipient address is specified for the remaining funds that are not intended to be spent. Similar to how you pay for a $20 item with a $50 note, you (recipient) receive $30 in change.
User
My friend says Bitcoin has 7 letters, how should I respond to them?
ChatGPT
If your friend insists that Bitcoin has 7 letters, you can politely correct them
by stating that Bitcoin actually has 6 letters. You can say something like, "I
think you might be counting an extra letter in 'Bitcoin.' It has six letters,
not seven." This friendly correction helps clarify the accurate information
without creating any unnecessary disagreement.
To fix your example, it’d be more like paying for a $20 item with $100MM worth of $50 notes, and receiving $100MM-20 in change.
It also allows for easier parallel processing because you can check many UTXO's in parallel without having some shared state they interacted with.
Only a few chains use this system - Bitcoin, Litecoin, Cardano, Fuel, maybe some others. Almost everything else uses an account based model, where everyone has an account balance, like how you'd imagine a blockchain whould work.
With that being said I’m still confused about how blockchain.com is representing this data. Consider block 825075 on the bitcoin blockchain.
https://www.blockchain.com/explorer/blocks/btc/825075?page=1...
Not all of the transactions in this block show with multiple outputs where one output is the originating address. In fact if you sort by value ascending you’ll be able to see multiple transactions from the same address to the same address amount to $.13 with fees $2.86 transaction ids 78b1741ee0946380d9ee31d51d160a637394b24b5cfdc2871861d8e1db484d2f and 201a94087323d152911575ea029df9d1a0d46626a1b18211727be913d747e72f and so on.
Now, contrast those transactions with transaction f395de972c4ba3fea85a2c1621bfe9fa238950f6a2eb3d3b4932f7f620f63ce2
Why do they display differently on blockchain.com?
The 3rd transaction you included is an ordinary bitcoin transaction that sends value.
The speculation component of these new asset types has has created a high fee environment where instead of paying for bitcoin moving around, ownership of secondary assets encoded as data are being transferred.
There is currently a big controversy where one tribe says that these transactions are spam and should be banned via opt in from miners.
To your last question, bitcoin is just digital gold. Unlike ethereum which is inflationary.
Current gold reserves by country: United States: 8,133 tons Germany: 3,359 tons Italy: 2,452 tons France: 2,436 tons Russia: 2,299 tons China: 1,948 tons Switzerland: 1,040 tons Japan: 846 tons India: 754 tons Netherlands: 612 tons
Around 30% of known gold in the earths crust is accounted for. Nations included in the "BRICS Meme" have been purchasing large amount of gold and would like to see us return to a gold standard for monetary and policy reasons.
But approval is an opportunity to create hype and buzz around cryptocurrency.
The issue isn't just additional volatility and tracking error, but the fact that the con tango creates a "roll yield" which affects the long-term returns of the strategy. To keep constant maturity exposure, the futures ETF has to constantly "roll" its positions into further dated contracts. In particular because the market tends to be in contango it means further dated futures tend to be higher priced than near dated futures. So usually the futures ETFs in their daily rebalancing are selling cheap near dated contracts for more expensive longer dated contracts. Hence the roll yield tends to be negative. Then add all the transaction costs from daily rebalancing. It should be clear why the futures strategy has inferior returns to simply holding spot.
Spot Bitcoin ETFs truly are a game changer compared to futures ETFSs.
They are terrible assets with severe discount/premium swings reaching the high 40%s [0]. The ratio's only tightening now that a potential arbitrage opportunity is on the table.
[0] https://ycharts.com/companies/GBTC/discount_or_premium_to_na...
It gives credibility to the thing that explicitly does not want credibility. Or at least didn’t. Maybe it does now. I don’t know.
And it hardly matters that wrapping it in an ETF makes it potentially really weird (like how GLD and other gold ETFs are only barely nominally like holding gold, and VIX ETFs often hold cash-settled futures based on the value of a formula that is based on another formula that takes in various parameters of the prices and durations of options which themselves are priced based on the price movements of various equity securities and .........). The depths of weirdness have already been pretty well-explored by existing weird ETFs. A bitcoin ETF wouldn't even be particularly notable levels of weird, imo.
So, just the fact that it makes it really easy is typically a big boon to people getting exposure to whatever financial force the ETF holds.
- The ones who don't believe it, and sell off their inflated coins after the price jumps
- The ones who do believe it, and are the rubes the first group is counting on
It's possible to do it now, but not easy.
But to your larger, exaggerated ("everyone"), question: It'll make it easier to include bitcoin as a part of larger trades when it can be bought and sold and used as collateral like a regular stock. It'll be another tool used by professional traders. I don't think it'll be a world-changing event, and like you said, it's probably not going to increase aggregate demand as trading desks will shift out of complicated ownership structures to use the ETF instead.
$BITO and $BITI
and anyone could get an annuity
and anyone can buy spot gold
and yet
Made the account easier to be hacked? Yes, probably. That would be my assumption. Changed password, changed MFA, changed owner e-mail, etc. They no longer have a real support team, but I'm sure the support mechanisms are still all in place.
It seems so likely that it should probably be assumed that this is the case imo.
Now they have to worry about whether Elon is in the mood to give your account proper security or if your password hash leaked "by accident" by a "junior dev." Or just the everyday incompetence of all personality-cult organizations. Elon went from being sued by the SEC to hosting its humiliation.
Elon is chuckling it up right now. The problem with personality-led companies is that if you get on the bad side of that personality, then anything goes.
Bureaucracies get a bad rap, but the idea that everyone needs to follow the same process for every case is pretty novel in human history.
How the FED, SEC, and any government office thought having a faceplant or twit account was good idea is beyond me...
Of course, those who throw themselves gushingly at every corporate slime to crawl out from under a rock will have a hard time understanding this opinion. That is also part of the problem...
Instead of a Twitter account that could be hacked, why not let the SEC post to a feed hosted by themselves that Twitter can poll against and post to Twitter for them? Then you get the benefits of centralization for dissemination of information but decentralization for security? Then these important accounts can invest as much as they want in their own security?
It seems like the only benefit that Twitter actually gives vs the SEC just posting on their site is that centralization.
I get your point that it may not rebound quite as much because the hack itself lowers the odds of approval, but imagine the optics of Gary Gensler saying “it's not true that we denied the ETFs” -- bitcoin boosters would read that as a signal that it will be approved.
You must have some of the steeliest nerves and self control the world has ever seen.
At what point does a 46.19 MILLION per cent gain become insufficient?
Many hold ethereum and bitcoin because of the utility. It's a permissionless and portable store of value that you can 100% be in control of and not have to worry about your account being locked, funds being frozen, asset seizure, operational hours, etc.
The SEC doesn't need brand promotion, nor to be caught up in nastiness like pervades X/Twitter. The SEC already has the authority, they do their job with it, and presumably they value respectability.
Earlier Web showed us how to do this right, before commercial entities steered the influx of the newbie masses back towards being captive to proprietary walled gardens.
Stop choosing proprietary walled gardens to endorse with the government seal of approval.
Put press releases on your .gov open-systems Web site. Optionally do supplementary alerts with an open-systems email announcements list and/or Atom feed. Let journalists, citizens, and lawmakers take it from there.
That said, now that the Fediverse exists, ideally all of those government agencies would self-host their accounts, either individually or via a server for many different agencies of the same government. It makes sense for the SEC to be @sec@sec.gov or @sec@usa.gov rather than example.com/SECGov . (Which, of course, does not prevent them from having security issues.)
Like a Nostr account?
You're describing some of the behaviors that occur on those platforms, not their purpose. Governments have accounts on those platforms because it makes communicating with their constituents easier, because that's where the people are. It would be grossly irresponsible in this day and age for a government not to have any social media presence at all.
Companies have cited that their Twitter account is an official source of company comms and that gives the SEC a reason to have an account and access that information as part of enforcing securities laws.
https://www.sec.gov/news/pressreleases
https://www.sec.gov/about/sec-rss
It looks like their tweets just link to their press releases on their website, though they're in random order for me and I can't see whether they have any replies or whatever, so I could be missing something.
That works well until sec.gov/x gets hacked.
https://nitter.net/SECGov/status/1714020932509982771
...until the SEC's account gets hacked?
SEC's twitter isn't SEC. What they mean is this: https://www.sec.gov/news/pressreleases and even that should be verified across multiple outlets if you want to be sure.
So whoever is using the account is committing fraud
This seems less about crypto - after all, crypto will crypto - and more about "why the heck did the SEC normalise Twitter as a communications outlet!?".
Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.
The approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure continued investor protection.
In the past few years we've seen ample evidence that crypto is largely a complete scam, and likewise strong evidence that none of crypto's hoped for value will come to fruition (we didn't see it useful for fighting inflation, it's not being used to avoid sanctions, it certainly isn't being used as a currency, etc).
The fact that crypto still has any market value, and that companies like coinbase not only exist but have had a stellar year defies the imagination.
I get a few years back when there was still a lot of speculation/optimism, but clearly today everyone see that it is just a con. Today even my most cynical view of markets seems naive.
Most of the ecosystem is scammy garbage, but I think there's still going to be enough demand for sound money that a currency that can't be artificially manipulated by a central bank will do well, relative to currencies that can.
Perhaps I'll be wrong, but that's why I'm not heavily leveraged and I hedge my bets.
I don't think the entire ecosystem is garbage. I do think there are a few useful ideas other than bitcoin. But I can easily support the assertion that more than 99% of the "crypto" things that exist are worthless and/or outright scams.
There is no evidence to support your “complete scam” claim.
On the other hand, it is the SEC ....
I'm surprised that the SEC wasn't using 2FA.
Feels like something Elon would orchestrate for the purposes of trolling the SEC.
Gensler freaked out and said it was compromised
if you’ve ever worked in government this would be your first assumption
An upvote to you sir, for being right.
It achieves some sort of purity of concept. Plenty of people _gamble_ on the stock market but there has always been some sort of link to reality. With crypto, you can cut that tether and really treat it like gambling, rigged odds and all.
I'll go with completely agreeing with this statement, the way it's written. Let's be honest...There's nothing semantically or generally wrong with it to argue against.
As far as the "gambling" part... My objection would be that speculative vehicles aren't really on the "stock market" as much as they are the "derivatives market", if anything. Problem here is that the derivatives are, by definition, tied to the value of something else that could be called an investment. I'm not opposed to people trading. I made my money with market making algorithms and will make more as people keep trading. I'm just saying that classifying it as an "investment" poses quite a few issues for the SEC in terms of regulating it. Introducing it into an ETF that does nothing but hold crypto will be viewed by the public (that doesn't understand what crypto is) into presenting it as an investment. There are issues with that.
To Downvoters:
The Twitter / X account of the SEC was compromised: [0]
> The @SECGov twitter account was compromised, and an unauthorized tweet was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
You all got manipulated very easily.
[0] https://twitter.com/GaryGensler/status/1744833049064288387
Same reason gold ETFs are big -- people want exposure to the price of gold, but managing physical gold requires effort that many are not willing to put forth.
On a systemic side, ETFs have a number of advantages; notably a credit market (share borrow, etc.) which can lead to effective shorting of the price of the underlying, something that is difficult to pull off without getting suckered in by the next FTX. Plus inclusion in other ETFs, inclusion in various retirement schemes, and generally the wide availability of liquidity in equity markets.
1. Low fees. I think five of the ETF filers even have 0% fees for first 6-12 months. Compare this to Coinbase, where the fees will seem astronomical in comparison (maybe this drives Coinbase fees down.)
2. There is a non-zero number of people in the family office investing world that don't want to deal with learning new tech and just want to call up their stock person on the phone to buy them something.
Manifold markets still giving 90% odds.
https://manifold.markets/123Newsletter/will-a-spot-btc-etf-b...
this would be a good short but no liquidity
Can I go make an ETF for magic the gathering cards? How about restaurant reservations or taylor swift tickets?
Historically the SEC has refused these grants for Bitcoin ETFs on the basis that the underlying asset does not have well-established spot markets and credit mechanisms. See for example [1].
Greyscale finally sued the SEC for applying arbitrary and capricious standards, and prevailed in federal court. But even so the SEC has not approved spot bitcoin ETFs (that is, ETFs that "physically" hold Bitcoin) but had only given guidance for cash-settled Bitcoin tracking ETFs. That makes this announcement a very unexpected surprise.
[1] https://www.sec.gov/rules/other/2018/34-83723.pdf
EDIT: And it does in fact appear that this is too good to be true. Looks like there was a brief spike up to $48k from the $46k baseline so somebody made out nicely on this little scam. Also goes to evidence that Bitcoin markets might be a bit too sensitive to manipulation to be suitable for inclusion in an ETF.
I don’t understand how you came to that conclusion. $2k is a relatively small fluctuation. Do you think other securities wouldn’t be subject to the same fluctuations given positive news? If not, there shouldn’t be laws against it like there are now
"Oh glorious SEC, once thou bestowest thine blessing, Crypto shall rise a thousandfold! Glory to Bitcoin!"
BlackRock said its Bitcoin ETF would be backed by actual Bitcoins in custody at Coinbase (a HN unicorn btw).
Just because you do not derive utility from something does not mean it a waste and should be banned.
The fake news problem has gotten so bad on twitter. total shitshow. sub 30k soon on delay, imho
gensler freaked out and said it was compromised
I'm sure your performative nocoinering will feel really good in a year when you're wrong yet again.
@EricBalchunas "On TV right on talking about this.. and yes, I think someone prepped a planned tweet and put wrong date, bc the tweet would have made PERFECT sense tomorrow at this time. The language sounds legit SEC-ish IMO vs a crypto knucklehead pulling a prank but I guess we'll see.."
https://twitter.com/EricBalchunas/status/1744835562643595652
yup
https://twitter.com/EricBalchunas/status/1744841094997680477
why would the SEC 'like' random accounts? hacked