
SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf] - jrbedard
https://www.sec.gov/rules/sro/batsbzx/2017/34-80206.pdf
======
chollida1
Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye.

Wow.

From the ruling....

> First, the exchange must have surveillance-sharing agreements with
> significant markets for trading the underlying commodity or derivatives on
> that commodity. And second, those markets must be regulated.

> Based on the record before it, the Commission believes that the significant
> markets for bitcoin are unregulated. I'm not sure I entirely understand if
> they mean that Bitcoin itself must be regulated or just that the SEC needs
> to see that the major exchanges are regulated.

If its the former, then I think this is game over, if its the later
then............hmmm I really don't know.

EDIT Having gone through the ruling it looks like they have a few
reservations.

1) Most of the bitcoin trading happens on unregulated markets

2) Most of the volume happends in China and not the us and is therefore hard
to regulate.

3) The ETF is tied to the Winklevoss own Gemini exchange which has little
volume and often inferior pricing to other more liquid exchanges.

4) They bring up the lack of a liquid futures market, though I'm not sure this
is really a concern.

> The Commission has, in past approvals of commodity-trust ETPs, emphasized
> the importance of surveillance-sharing agreements between the national
> securities exchange listing and trading the ETP, and significant markets
> relating to the underlying asset. 144 Such agreements, which are a necessary
> tool to enable the ETP-listing exchange to detect and deter manipulative
> conduct, enable the exchange to meet its obligation under Section 6(b)(5) of
> the Exchange Act to have rules that are designed to prevent fraudulent and
> manipulative acts and practices and to protect investors and the public
> interest

So until bitcoin markets are regulated by the SEC or similar no ETP/ETF
products I suppose.

I'm a bit disappointed that there is no ETF but this is pretty darn
reasonable.

~~~
thinkloop
The next step seems to be to create a regulated market - anyone know what that
means, or whether there is something inherent to Bitcoin that doesn't allow
it? Coinbase has KYC, banking relationships and tax integration, I'm sure that
can be extended to an exchange.

~~~
kolinko
You'd need to force all the unregulated exchanges to close down, and block
ability to run smart contracts or any other software on it.

And do it in all the major jurisdictions?

~~~
djrogers
Not "all" of the exchanges - I think the key is the term "significant
markets". You need to have most people who do significant amounts of BTC
transactions on regulated exchanges as opposed to everyone.

------
subverter
Coin Center executive director Jerry Brito:

> The Winklevoss ETF proposal was rejected because the SEC found that the
> significant markets for Bitcoin tend to be unregulated overseas markets that
> are potentially subject to price manipulation. But this creates a chicken
> and egg problem. How do we develop well-capitalized and regulated markets in
> the U.S. and Europe if financial innovators aren’t allowed to bring products
> to market that grow domestic demand for digital currencies like Bitcoin?

Source: [https://coincenter.org/link/coin-etf-
statement](https://coincenter.org/link/coin-etf-statement)

~~~
dragonwriter
The SEC's job (relevant to the issue at hand) is not to make it easy to drive
demand in the US on the hopes that that might create conditions for mature
markets in $COMMODITY, it is to assure that exchanges listing derivatives of
$COMMODITY have adequate rules in place to protect against manipulation,
including manipulation of the derivative through manipulation of the
underlying commodity.

If the key driver for domestic demand for the commodity is readable
derivatives such that one needs to create such in order to drive demand, then,
well, _too bad_.

If there is sufficient inherent utility in the underlying commodity, you won't
need to violate normal exchange criteria to create derivative markets to
stimulate demand for the commodity, the commodity will drive itself, and
create the conditions where it won't be unduly onerous to create derivatives
markets that meet the normal criteria.

~~~
blusterXY
How did oil ETF pass with OPEC in existence? Did they just stop doing their
job that day?

------
johnyzee
This is a pretty big blow.

The ETF has been the talk of the town for the last four years, and it is not
unreasonable to think that it has been holding the hand under the price, since
to a lot of people it represented the coveted inflow of institutional
investment into bitcoin.

With this gone, the immediate outlook for bitcoin is bleak. There is little
market adoption to speak of, in fact bitcoin is probably losing market share,
as the initial hype and attention grabbing announcements of bitcoin support
have died down, and a lot of merchants have decided that the miniscule
business it drives is not worth the trouble. Also, the network is straining
even under the current load, leading to (much) longer transaction confirmation
times and higher fees. The average fee for a bitcoin transaction is now almost
one dollar - this rules out a lot of use cases that previously people would
have said were ideal for bitcoin.

Which leads me to the even bigger problem: The bitcoin community and ecosystem
is in a massive deadlock, between two sides that are equally rabid and
antagonistic, and dividing the project down the middle, between the developers
and the mining operators. Few outsiders likely know how bad it has become, but
visit r/bitcoin and r/btc on reddit if you're curious. This would be
concerning in itself for the future of the project, but it also means that
right now _no major updates can be made to the bitcoin network_ , because each
camp runs a big percentage of the network and block any new initiative from
the other side.

All of this makes me very bearish for bitcoin in the medium term. I am very
sure that bitcoin has a future, but how long out that is, and how big it is,
remains doubtful and could well be influenced negatively by particularly the
issue of governance. Satoshi once said something like "in ten years bitcoin is
either worth a huge amount or nothing". I'm starting to fear that might not be
true - bitcoin could also become a small niche platform for a very limited set
of use cases.

~~~
anonu
> since to a lot of people it represented the coveted inflow of institutional
> investment into bitcoin

I would say coveted inflow of retail investment. I don't think any serious
institution would invest in bitcoin. The risk is too high given that the AUM
can go to 0 instantly with one data breach.

------
gregshap
So what are the expected benefits of a bitcoin ETF? Many of the traditional
benefits of ETFs are obsolete when you can just buy and hold an equivalent
amount of bitcoin

The biggest benefit I can think of is that some institutional investors have
restrictions on the types of securities that they can buy.

Someone could solve this by creating a company to buy lots of bitcoin, and
then having an IPO to list that company on a public market. Then pension funds
would be allowed to buy it, Jane Doe could buy some in her IRA, etc.

Any reason this wouldn't be just as good as an ETF?

~~~
dnautics
> Someone could solve this by creating a company to buy lots of bitcoin, and
> then having an IPO to list that company on a public market. Then pension
> funds would be allowed to buy it, Jane Doe could buy some in her IRA, etc.

You're repeating yourself. That is more or less what an ETF is.

~~~
gregshap
Got it thanks, that makes sense. I guess I was expecting this proposal to
somehow be more complicated, and didn't realize that the bar is this high for
listing a company thats a bucket of X holdings.

------
mahyarm
So if you have a rare-earth metal commodity ETF that can be dug from the
ground in conflict areas and have exchange markets in these wild areas, would
the SEC deny that commodity ETF then because they wouldn't have surveillance-
sharing agreements with those markets?

~~~
twic
Why would the exchanges be in the areas where the metal is mined? The London
Metal Exchange seems to do pretty well despite the scandalous lack of zinc
mines or steel mills inside the M25.

~~~
mahyarm
In this hypothetical situation, lets say it's because the countries that the
occur in want a cut of the proceeds, so they force the sale of these metals to
be in their country.

And instead of rare earth metals, lets say it's iron? Something that is
mineable almost anywhere, kind of like bitcoin. So you would have exchanges
with these agreements, but you would also have exchanges without the
agreements.

------
JoshTriplett
It's interesting, based on the rest of the ruling, that they're not
_particularly_ concerned with any other aspects of it as a commodity (they
acknowledge various interesting properties of it but note that those wouldn't
themselves prevent them from approving this), but instead solely concerned
that the rest of the Bitcoin market isn't controlled and monitored well enough
for them to regulate activities on it.

~~~
dragonwriter
The criteria of surveillance agreements with regulated markets for the
underlying asset appears to be (based on the discussion in the paper) well
established, clear in its application to the facts, and dispositive in this
case.

That doesn't mean it's their biggest concern; regulatory entities (and courts)
tend to focus on criteria that meet those qualifications over other because
they produce decisions which don't require creation of substantial new
rules/precedent, and are more difficult to challenge.

------
politician
"The Commission believes that, in order to meet this standard, an exchange
that lists and trades shares of commodity-trust exchange-traded products
(“ETPs”) must, in addition to other applicable requirements, satisfy two
requirements that are dispositive in this matter. First, the exchange must
have surveillance-sharing agreements with significant markets for trading the
underlying commodity or derivatives on that commodity. And second, those
markets must be regulated.

Based on the record before it, the Commission believes that the significant
markets for bitcoin are unregulated."

~~~
matt_wulfeck
Which is exactly right, but couldn't the same argument be used against a gold
etf?

~~~
greenyoda
Isn't gold traded on commodities exchanges, which are regulated?

Note that the CFTC, which regulates commodities futures trading, is (or was?)
considering regulating digital currencies:

[https://en.wikipedia.org/wiki/Commodity_Futures_Trading_Comm...](https://en.wikipedia.org/wiki/Commodity_Futures_Trading_Commission#Regulating_digital_currencies)

However, it doesn't seem like they've come to a decision yet.

------
JamieF1
Yet the price has only dropped around 80 dollars compared to yesterday. Not
too bad. For a few minutes it dropped by around 250 dollars but it picked up
quickly somehow.

~~~
problems
It just happened, not many people are aware of this news yet and Bitcoin tends
to be volatile as all hell, give it a few days to sort itself out.

~~~
kitcar
More specifically, wait for the news to be translated to Mandarin

------
Taek
This is a good thing for Bitcoin. The ETF rules in my opinion gave too much
power to miners. The rules stated that the ETF would follow the chain with the
most work after just 48 hours.

Miners need income, because mining is actively expensive. In the long term,
this means they have to mine on the chain with the most valuable block reward.
This means the economy really gets to decide the longest chain, not the
miners.

But the ETF likely would have been large enough to tip the scales. Miners can
stomach 48 hours of loss to push an agenda.

And it's probably not good to have such a huge portion of the economy in one
place anyway. An ETF will make more sense when bitcoin has more maturity.

~~~
Analemma_

      function generateBitcoinNewsReaction(oldPrice, newPrice) {
        if (oldPrice > newPrice) {
          return "This is good for bitcoin.";
        } else if (oldPrice < newPrice) {
          return "This is good for bitcoin.";
        } else {
          return "The price is stabilizing; this is good for bitcoin.";
        }
      }

~~~
SilasX

        function generateBitcoinSkepticism(oldPrice, newPrice) {
            if (oldPrice > newPrice) {
              return "It was a bubble all along.";
            } else if (oldPrice < newPrice) {
              return "Deflationary currencies can't work";
            } else {
              return "The market cap is too low to support a stable currency";
            }
          }

~~~
kaleidoscopica

       generateBitcoinNewsReaction();
       generateBitcoinSkepticism();
       generateButteryPopcorn();

~~~
colordrops
Lots of frontend devs here on HN huh.

------
mrb
In summary: " _First, the exchange must have surveillance-sharing agreements
with significant markets for trading the underlying commodity or derivatives
on that commodity. And second, those markets must be regulated. "_

------
waynenilsen
I am surprised to see how many people on HN do not understand the value
proposition of Bitcoin.

~~~
oska
HN is notoriously bad where discussion of bitcoin is concerned.

~~~
Frogolocalypse
Yes, it's a bit weird.

------
niklasbuschmann
[https://cryptowatch.de/kraken/btcusd](https://cryptowatch.de/kraken/btcusd)
\- chart

gravity is strong here

------
HMehr
I very much agree with SEC's decesion, just for other reasons.

The usuall ETFs are baskets of bonds, stocks and commodities. Regardless of
the level of volatility, they are all priced per the capacity of those
stocks/bonds/commodities to create economical value. That means you have a
solid economical logic to price them. Of course, supply and demand impacts the
price, but even if no one wants to buy a certain stock, that stock has a
marketable value. You can take the assets of that company, sell them and
divine the cash by the number of stocks out there. Without going to too much
details, I fail to understand how bitcoin can be treated like a
stock/bond/commodities? Bitcoin value is purely based on the supply and demand
forces. Without supply and demand, bitcoin has no value. On its own, it has no
value generation power and therefore cannot be compared or traded like a
stock, neither can be packaged into an ETF.

As much as I do not like to agree with SEC, this one is a right decesion!

------
jacquesm
> First, the exchange must have surveillance-sharing agreements with
> significant markets for trading the underlying commodity or derivatives on
> that commodity.

> And second, those markets must be regulated.

So, essentially: bitcoin does not and can not satisfy these two conditions
(nor can any other such scheme) and therefore you can't trade anything that is
directly or indirectly representing bitcoins.

------
jtlien1
Something useful like bitcoin etf gets rejected. But look at some of the
stocks that are allowed to trade... Magnegas for example has been an ongoing
fraud for 17 years. Fake delivery of machines to Kazahkstan. It would be easy
to prove this a fraud but the SEC does not care.

~~~
celticninja
This is the same SEC that ignored multiple warnings about Madoff because they
didn't want to know the truth.

------
mbrookes
This ruling should win an award for plain English - it's exceptionally well
written. (not /s)

~~~
matt4077
You may enjoy the US Supreme Court's writings. Their judgement are usually
really well-written and understandable.

~~~
mbrookes
Funny you should mention it, as legal judgements are not the sort of thing I
normally have reason to read. However (copyright troll) Prenda Law's 9th
Circuit appeal on sanctions came up in discussions on HN a couple of days ago
and, having watched the humorous video of the proceedings, was curious as to
the outcome, so tracked down the ruling [1]. It was similarly well written.

As a lay-person I've come to expect convoluted legalese as found in contract
terms, but where those are typically designed to bamboozle and obfuscate, or
at least keep corporate lawyers employed decoding and negotiating each others
writing, judgements and rulings are designed with the opposite goal in mind.
If you are potentially creating case-law, it better be clear what you have
decided and why.

[1] [http://law.justia.com/cases/federal/appellate-
courts/ca9/13-...](http://law.justia.com/cases/federal/appellate-
courts/ca9/13-55859/13-55859-2016-06-10.html)

------
delieum
This seems to be a victory for bitcoin. Why would a government entity know
what to do with a purposely designed non governmental decentralized currency?
Especially a profit seeing ETP loaded on top with 0.xx% commission? It's
ludicrous to imagine the SEC jumping on this train, BTC will outlive them. As
for the Wrinkles twins, they are profit seekers, nothing more. The purpose of
a decentralized currency is to be a decentralized currency, enabling peer to
peer outside of sovereign intervention economics. This is a non sovereign
movement regulated by supply, demand, peers sprinkled with occasional robbery
here and there. This digital currency which will outlive many sovereign states
that currently exist.

------
EternalData
The volatility of bitcoin to regulatory announcements is basically sky-high,
and I imagine a money making opportunity.

Checked Coinbase right about 30 minutes after it cratered down to 995. Text
price alerts don't seem to be working :/

------
tormeh
Can't they just file in another country? I mean, it doesn't really matter
where it's traded; any decent bank will give you access to at least the LSE
and Xetra in addition to the two big American exchanges.

~~~
olegkikin
It matters, because the US retirement funds (401k, IRA) can't invest into some
other country's ETFs, correct me if I'm wrong.

~~~
fennecfoxen
This would be news to me.

US 401k / IRA accounts can, and do, buy stocks in a variety of markets,
whether directly or through instruments such as NYSEARCA:VEU (also available
as the mutual funds VFWAX and VFWIX.) I'm not aware of any special reason why
foreign-traded ETFs would get special treatment that foreign-traded stocks
don't?

------
nonbel
There is another proposed ETF being ruled on in a couple weeks:

>"The Commission, pursuant to Section 19(b)(2) of the Act,9 designates March
30, 2017 as the date by which the Commission should either approve or
disapprove the proposed rule change."

[https://news.bitcoin.com/sec-delays-decision-solidx-
bitcoin-...](https://news.bitcoin.com/sec-delays-decision-solidx-bitcoin-
trust/)

------
aphextron
Can someone please explain to me the logic in treating Bitcoin as an
investment vehicle? I get that fiat currencies are traded like equity, but
this is not that. I also understand that there is a huge potential for short
term gains, but the risk is just as great for a total loss.

Bitcoin is a means of transferring wealth. It is a tool, not a commodity. When
are people going to stop this speculation and treat it as such?

------
appcloud
The Bitcoin markets don't have to be regulated for this ETF to be tradable.
The Winklevoss could still list their ETF on the OTC Markets and anyone with a
brokerage account would still be able to trade it. There's already a Bitcoin
Investment trust that is currently tradable on the OTC market though as one
commenter mentioned it's currently trading at a premium.

------
choxi
Could someone explain what a Bitcoin ETF is? My understanding is that ETFs are
like index funds, which group other stocks into one basket. There's only one
Bitcoin though, so what would a Bitcoin ETF collate? The "Description of the
Proposal" didn't really make that clear to me.

~~~
ThrustVectoring
ETFs group arbitrary assets into something that can be traded like a stock. So
the closest comparison would be something like a gold ETF, which lets you buy
and sell something like you would a stock with gold's approximate price. A
Bitcoin ETF would let you buy and sell something like you would a stock with
Bitcoin's approximate price.

It's basically a wrapper class that lets people interact with things as if
they were stocks.

------
dhosek
Here's the basic thing: Bitcoin is fatally flawed. Is it meant to be a payment
method (in which case an ETF or otherwise treating it as an investment vehicle
is roughly as nonsensical as having an ETF that deals with blank checks) or is
it an investment (and if it's an investment, what on earth are people
investing in?). The volatility of Bitcoin plus the constrained supply leading
towards upwards pressure on the price of bitcoins mean that it's a
deflationary currency and deflation is a bad thing as it creates an incentive
to not spend. This means that the only real reason to spend Bitcoin or
otherwise use it as a payment is for situations where that's the only option
and right now, and for the foreseeable future, that means assorted illegal or
at best borderline illegal products, which gives it a halo if unrespectability
that the Winkelvoss twins are not going to erase. Perhaps a blockchain-based
cryptocurrency might in the future resolve these issues, but otherwise it's a
doomed product that I wouldn't put a single penny (or watt of household
electricity) into.

~~~
TwoBit
How is Bitcoin significantly different from gold?

I suppose gold does get used for something.

~~~
djrogers
Nobody is pushing for vending machines or retailers to take gold...

~~~
jacquesm
[https://en.wikipedia.org/wiki/Gold_to_Go](https://en.wikipedia.org/wiki/Gold_to_Go)

------
jbmorgado
As usual in the bitcoin universe we are going to get a lot of people trying to
explain you why something they were saying it would be so great for bitcoin
until 1h ago, is actually a very bad thing for bitcoin and that this was
actually the best possible scenario.

~~~
orclev
First time I've even heard of this honestly, but my reaction is sort of "meh".
Might have been interesting had it gone through, but I don't see how it
changes much of anything that it didn't either. The courts ruling seems fairly
reasonable as well in that bitcoin is a relatively unregulated commodity (in
as much as a currency not controlled by any government is unregulated) so I
can't really say the ruling was unfair. Given a choice between increased
regulation of bitcoin and allowing the exchange to go forward vs. keeping the
current relatively lax regulation and no exchange, I'm of the opinion no
exchange is the better option.

There's also the minor fact that a significant chunk of wallstreet already
treats most of the bitcoin markets like commodity exchanges anyway. A
significant driver of the massive instability in the bitcoin market is
directly attributable to wallstreet treating bitcoin as a commodity. One
possible upside of having an actual commodity exchange is that it might have
helped stabilize some of that by decoupling the speculation from the actual
bitcoin market a little, but I guess we'll never know at this point.

------
nassirkhan
I wonder what assets are resistant to mass systemic failures arising due to
calamities such as war etc. Bitcoin: without the internet, it would be hard to
transact Fine Art and Gold: hard to carry around Dollars, land, guns, alcohol?

------
jzig
Coinbase is down.

~~~
AYBABTME
I've just been trying out Coinbase recently and I'm pretty annoyed with them.
For one, Canadians can't sell & withdraw money, and their buy/sell limits are
ridiculously annoying. On top of this, their fees are very expensive and just
right now, they have an outage in the middle of an important news. This is
like failing at all the core important bits.

Is there a more serious thing than Coinbase that exists?

~~~
eminkel
Kraken.com?

~~~
corford
+1 for Kraken, their track record is excellent

------
hisabness
How did you find this? I was unable to do so from the SEC's main page.

------
jabgrabdthrow
That's a bummer I always hoped I could invest into an Exchange Traded version
of exposure to Bitcoin

ha ha ha, now china gets all the exchange data, morons

------
saycheese
What is the best real-time source for Bitcoin's value?

~~~
anonova
[https://cryptowat.ch/](https://cryptowat.ch/) is great. The front page gives
a good overview of bitcoin and other cryptocurrencies. Click on one to see
charts.

------
h1d
PBoC must be pissed if their intention of suspending leverages from Chinese
exchanges was to smooth out the ETF approval.

------
cgb223
Whats the advantage to buying into a Bitcoin ETF vs just buying the same value
directly in Bitcoin?

~~~
myowncrapulence
Tax avoidance on capital gains since it can be added to your IRA. Also it
would allow bitcoin to be purchased from any trading station in the US rather
than a website you have to sign-up for

------
wnevets
Bitcoin fans will still try to spin this as good for bitcoin and that everyone
needs to buy bitcoin now

~~~
astrodust
On sale, 25% off!

------
bellajbadr
i don't know why people get surprised it was obvious from the begining sec
won't approve the request i am afraid it was just a trader manipulatioin

~~~
lajy
Surely you made a lot of money shorting the market today then, right?

------
nikolay
Bubbles burst. Even the current price is pumped by China and the miners who
can't survive at a low price. The crash to $0 is way overdue.

------
Mikeb85
Good. It makes no sense to base an ETF on an unregulated crypto-currency. It
was pretty much just a scam to juice the Bitcoin price...

------
PaulHoule
At least somebody has some sense.

------
antocv
Time for people to start using [https://byteball.org](https://byteball.org)

~~~
gchokov
Pff

------
joecool1029
that was great to watch, went from $1300 to $975 in about 90 seconds.

We'll see how long the dead cat lasts.

See you at $600.

~~~
paulpauper
imho it stabilizes and goes back to 1200. It surged from 2011-2014 without the
ETF...Bitcoin is seen as a safe haven against global destabilization. A lot of
money on the sidelines looking for a buying opportunity that has come

~~~
ceejayoz
"Bitcoin" and "safe" in the same sentence is an odd look.

~~~
paulpauper
safer than many foreign currencies, which have lost 30-99% of their value
relative to the USD since 2013

~~~
ceejayoz
As opposed to Bitcoin, where the statement is sometimes along the lines of
"lost 30% of its value since _20:13_ "?

~~~
paulpauper
In 2013, depositors in Bank of Greece lost 50% of their deposits above $100k,
overnight, by decree. Not saying Bitcoin is perfect, but the alternatives are
often not better.

~~~
tobltobs
Wasn't that in Cyprus?

~~~
rommelsLegacy
yes not only was it in cyprus but it was 60% and in addition the rest of the
40% you weren't allowed to touch it, or more generally you need to submit
around 3 forms to get funds from the money that is still there that you and i
state this "used to own"

------
hirokiky
I selled my BTC in these days but I didn't know this topic. Always charts of
BTC is too reactive so I think it's not for investment...

------
paulpauper
This is the same committee that approved VXX and UVXX ,which have lost 99.999%
of their value

There is an OTC fund that holds Bitcoin...but at a large premium to NAV

~~~
frgtpsswrdlame
VXX and UVXY buy and hold contracts in a contango futures market. They are
always going to decrease over long time periods. That is their design.

~~~
owenversteeg
People that don't understand VXX talking about VXX is one of the funniest
things on the entire Internet. For some good laughs, take a look at the
comments section on this post: [https://sixfigureinvesting.com/2013/04/how-
does-vxx-work/](https://sixfigureinvesting.com/2013/04/how-does-vxx-work/)

A choice quote from elsewhere on the Internet: "Write call spreads, collect
$$$ when they expire... this worthless stock is a goldmine!"

I have no words.

~~~
meric
XIV is the inverse fund, it looks like the real gold mine, rising 9 times in a
few years.

------
aric
Unrealistic security should be the only reason to disapprove of a bitcoin ETF
governed by the SEC. Not only is it poorly suited for reckless centralization
by thousands of indirect investors, but bitcoin as a whole would be setup up
for massive government retaliation once the keys are compromised. MtGox x
10,000.

------
brilliantcode
Having sold all of my bitcoin at ~800 at a small loss (a significant portion
coming from commission fee( ~$150+ to convert low four digit USD amount of
bitcoins to fiat.) I am paying attention to the bitcoin prices closely. As USD
gains more interest it's going to put downward pressure on gold and bitcoin.

There's no way this is going to gain mass adoption by being this expensive.

More importantly, this signals strong government regulation in the bitcoin and
cryptocoin industry in general. I wouldn't be surprised if we started seeing
security laws being applied retroactively to all the scams like initial coin
offering (like IPO but unregulated and heavily manipulated) on Bitcoin and
Ethereum.

To the wary trend watcher, this is exactly what VC's feared and noted by the
significant decline in VC investment in blockchain and cryptocurrency
startups.

~~~
wyldfire
> There's no way this is going to gain mass adoption by being this expensive.

I struggle to understand what you mean. What sort of anchor are you using for
how much the exchange rate should be for adoption? Cost of electricity, cost
of mining equipment, cost of running a node? Satoshis are so abstract that
"this expensive" seems irrelevant to everything except for historical rates.

Conventional wisdom on BTC is that one element that would improve adoption
would be lower volatility and that in order to get that, the market cap would
need to be much, much higher. Given the fixed inflation rate this usually
suggests that the exchange rate has to be correspondingly higher.

