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Bitwise Strikes Back Against SEC: Outlines Bitcoin’s Regulatory Progress

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In the growing battle between those in the cryptocurrency community, and those watching eagerly on the outside, Crypto index fund provider, Bitwise Asset Management, has presented to the SEC more reasons why Bitcoin is a well-regulated market.

This presentation is in a bid from the asset management company towards that holy grail of cryptocurrency – the Bitcoin ETF. And it comes a few days after the Chairman of the SEC, Jay Clayton, laughed off the idea of Bitcoin being listed on a major exchange due to lack of regulation. 

The SEC has outlined its issues with the Bitcoin market, especially in regards to granting an ETF in the United States, and these issues have mostly persisted. However, Bitwise, and others like VanEck, who recently withdrew their ETF application, believes things have moved on well. 

The beginning of presentation surrounded the evolution and regulatory changes that had occurred since last 2016 when the SEC was first approached about a Bitcoin ETF by the Winklevoss Twins. 

Firstly, the spot market has become more efficient, with the average deviation of Bitcoin price across the top ten exchanges falling. Although this was just under 1% back in December 2017, it has now dropped to under 0.1%.

More so, the presentation delved into the change in heart that is being seen by institutions and significant businesses in regards to both blockchain, and Bitcoin infrastructure. Bitcoin custody services are springing up, receiving licenses from local jurisdictions to manage and store Bitcoin for clients. 

At the same time, institutional financial interest is piqued. This year has seen record Bitcoin futures volumes on the CME suggesting that the regulated futures market has now become “a regulated market of “significant size,” Bitwise notes in its presentation.

However, one of the biggest sticking points for the SEC has been and continues to be, reports of fake volume across cryptocurrency exchanges. This has been seen as a blight on the market with a report suggesting that as much as 95 percent of the volume is faked. 

However, instead of hiding this fact, Bitwise has brought up that there are attempts being made to address it. There has been a visible response in addressing the concerns and implementing measures to ensure reported data was more accurate. Nine exchanges reported a 90%+ drop in volume, and three of the 73 named exchanges responded either publicly or privately.

Really, there is no denying that the Bitcoin market has come a long way since even a few months ago, and continues to solidify and mature. However, if it is ready for the SEC to give it the full green light is another question.

Darryn Pollock
Darryn has been interested in the blockchain and cryptocurrency space since he heard about Bitcoin in 2015. He then decided to use his journalism degree to report on this fascinating fintech space in 2016, and has not looked back since.

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