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As a preface. If you are reading this or following me, know that my primary strategy with crypto is laddering. I do this because of the volatile nature of crypto and it’s a far different beast from Forex where you can have tight stops, IMO -0.19% . If you are looking for someone to give you precise entry points for crypto (I give some for Forex), I am not the person to follow. If you want someone that will show you overarching ideas for crypto, give my ideas a look.
Earlier this month the delay of the VanEck ETF sent bitcoin 3.58% plummeting down along with everything else. However, before this news, ETFs had been getting the can kicked down the road for as long as possible. Why would this “sudden” delay and not even denial cause crypto to go plummeting down? Just the fact that companies are filing for Bitcoin 3.58% ETFs is very bullish to me. It means that the major players, (IE; ProShares, an ETF manager with 30 billion in assets) believes Bitcoin 3.58% is going to be around for a long time. You don’t spend hundreds of thousands of dollars on lawyers and SEC filing fees unless you know it’s going to get approved. These major players will get it approved. It’s not if or a maybe; it’s when. Before we dive more into that let’s look at the “cartel” aspect a bit first.
The people behind the curtain want cheaper crypto before it runs up again. They know that BTC 3.58% and especially ETH are tied to lot of ICOs. Cartel knows this, so they made the VanEck delay a big deal (when in fact it’s not) and the media spammed it to drive down crypto to cheap levels in order to buy. Not only that, but they know most ICOs are scams. They know ICOs don’t have a project, and their objective was to get money quickly. When everything started plummeting they also dumped. Whether an ICO 0.00% is a scam or not, they need to have currency to run their business or cash out.
On to the ETF discussion. The first thing to realize is the difference between the VanEck ETF and the ProShares ETF. The VanEck ETF is going to utilize physical crypto for their ETF. While that is big deal, a delay by the SEC is not very bearish in my view. The fact that someone is willing to have a physical ETF is bullish to me. In fact, expect the SEC to delay the VanEck ETF well into 2019. That’s what a government body does. They delay things.
The difference with ProShares. ProShares is an ETF based on the CME and CBOE -0.95% futures market. For reference, there are over hundred ETFs in existence at this present time that are based on futures markets. That being said, CME and CBOE -0.95% both have the blessing of the CFTC and are approved and regulated by the CFTC for their Bitcoin futures 4.03% contracts. I read an article about some of the SEC concerns with the Winklevoss ETF and why it was denied. Different scenario, completely. The Winklevoss’s couldn’t get their ETF approved even after the CFTC already approved two different futures market. You can say all you want that the SEC is favoring other entities over the Winklevoss’s, or maybe the Winkie’s just don’t know what they are doing because they aren’t finance guys? I think it’s that simple really.
It’s in the interest of all the major players to have another bull run. According to some stats on Coinbase, Coinbase trading activity has fallen by 80%. Similar stats are on Bitstamp and others. Coinbase made over billion dollars last year. Lack of interest in crypto kills their cash cow. They need price to increase so people are interested again. All of these major players are going to put a price floor in crypto. While I believe 6k is a perfect spot to do it and the ETF approval would be extremely bullish. The thing I am certain of is that I doubt it’s going much further down than 4k if it even gets there.
I don’t have a crystal ball….maybe the SEC doesn’t approve it and nothing happens. Most of the news I read expects the SEC to deny the ProShares ETF. For them, it will be surprising if it gets approved. For me, it would be surprising to see the SEC not approve a fund that is based on two CFTC approved derivatives already.
Happy Trading,
Sherem
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