This post is based on RealVision's Interview with Kathleen Moriarty.
Who is Kathleen Moriarty?
Moriarty has worked for U.S. Securities and Exchange Commission (SEC) and participated in many ETFs. The most well-known ono is SPY ETFs. (SPY ETFs designed to track the S&P 500 stock market index). That is why she has a nickname, "SPIDER WOMAN". She also worked for many groundbreaking ETFs, such as GOLD ETFs and Winkleboss Twin’s file for Bitcoin ETFs. She is THE EXPERT of ETFs.
(The SPIDER WOMAN, Kathleen Moriarty)
Does she think SEC will allow bitcoin ETFs?
In one phrase, not for now.
It is possible and likely, but not now.
Why is SEC not allowing bitcoin ETFs?
Moriarty said SEC only allows ETFs on regulated commodities. Bitcoin is traded through many different trading platforms in various countries. It is highly unlikely that those trading platforms (like Cryptopia, Bithumb, and Coinbase) will open up their books to SEC.
How does SEC want bitcoin to be regulated?
SEC wants trading platforms to open up their books. SEC thinks bitcoin traders and sellers should be regulated like brokers and dealers are. The hard part is bitcoin was born by people who do not want to be regulated and SEC will not allow bitcoin ETFs unless it is regulated. For instance, gold was highly regulated when SEC allows GLD ETFs.
What is SEC’s main concerns on bitcoin?
There are five main concerns.
- Valuation: Price of bitcoin is too volatile.
- Liquidity: It is not quickly liquidable. Yet.
- Custody: Fundmanagers are obliged to hire people who can keep and manage investor’s assets safely. However, bitcoin can be hacked, stolen, and lost.
- Manipulation: Bitcoin is prone to be hacked
- Arbitrage: Last year, BTC price in Korea was 30~50% higher than in the U.S.
What will happen when SEC allows bitcoin ETFs?
When gold ETFs first came out, the price of gold surged. The same thing will happen for bitcoin ETFs, because so many individual investors will have easier access and opportunities to buy bitcoin.
When will SEC allow bitcoin ETFs?
Moriarty said at least five years. When people who want to regulate bitcoin and people who do not want bitcoin to be regulated successfully found the middleground.
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