From The Desk Of A Trader #23
From The Desk Of A Trader #23
Why The SEC Should Reject The Bitcoin Spot ETF
Cheat Sheet -
Support and resistance levels and our daily, weekly and monthly bias on BTC, ETH, CL, ES, and NQ as well as our favorite altcoins.
Today, we are happy to share the thoughts from the desk of a retired commodities trader. The following views are that of Martijn Bron.
From The Desk Of A Trader
Current BTC market action is exactly the type of behavior which should make the U.S. Securities and Exchange Commission reject spot BTC ETF applications.
BTC behaves like it is being cornered, in a boiler room.
What is the problem with that, and why do I care?
While being part of the ICE commodity advisory group one of my main drivers was to retain an orderly cocoa market and prevent non compliant market conduct, like cornering (in cocoa referred to as a squeeze) by dominant positions, with the sole purpose to move the price.
Cornering the market is holding enough stocks, assets, or commodities to control the market price. It involves acquiring the biggest market share without becoming a monopoly.
Some say these things happen in free #markets, but regulated markets have rules to remain orderly, in the interest of all traders and investors.
Without these rules, bad actors abuse and manipulate markets in the interest of few, cause boom bust markets, liquidity being drained, and markets no longer to function.
I have experienced the cocoa market being manipulated and its destructive consequences well beyond the futures market itself.
Boiler rooms are designed to lure in as many investors to an investment as possible, often using high-pressure sales tactics. Boiler room operators may cold call investors or solicit investors through emails and social media to pump and dump.
The immense daily pressure on social media to lure in vulnerable, often desperate people to invest in BTC to provide them wealth and "freedom from the state", looks like boiler room tactics.
The driver of spot BTC ETFs is FOMO of fees from Wolves of Wall Street, and a continued need for speculative fiat money flows into BTC to support its price, while you can buy BTC via countless exchanges and facilitators already.
Some say "not your keys not your coins" and prefer cold storage, but others prefer futures for BTC exposure. The latter do not create additional demand for BTC though, they just track it. Spot ETF providers do need to buy BTC to sell ETF paper and create the desired BTC demand.
As BTC does not produce anything, and contrary to commodities, is not needed for consumption or manufacturing, its price gyrations are caused by speculative fiat #money flows in and out of it, in relation to a supply side which even before the '24 halving is rigid. Rigid in terms of concentration of ownership, hodling behavior and a coded supply limit which has nearly been reached. Do the last 1,5 million till 2140 make a difference?
There is no need to buy ETF paper, but market commentary about BTC's rigid supply and infinite demand implies there is no demand impact (price sensitivity) if BTC would trade from $40k to $100k in a void. Price discovery without liquidity creates a false sense of market cap and ability to liquidate.
This commodity like cornering is great Wall Street marketing to lure in investors, but a red flag for the SEC, as it is non compliant in regulated markets.
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