Better Markets Jeers Bitcoin After SEC Unofficially Approves ETF

Better Markets is unhappy with Bitcoin ETFs securing a win and is urging the SEC to shut it down.

by Insha Zia. Fact checked by: Ciaran Lawler, Editor: Stefan Trapp

Published: January 7, 2024 │ 2:45 AM GMT

A man exploding with anger, surrounded by blue flames. — *Created by Gabor Kovacs from DailyCoin*

The SEC has unofficially approved Bitcoin Spot ETF applications.
Anti-crypto nonprofit Better Markets is urging the SEC to reject the pending applications.
To justify its stance, Better Markets dragged Bitcoin, calling it useless, among other things.

Bitcoin ETFs are on the cusp of reaching the finish line, with the SEC and key players in the race moving toward the final stages of the approval process. However, while experts raise their glasses to celebrate the imminent decision expected in the following business week, Better Markets has dampened the festivities, cautioning the SEC that they may be on the verge of a ‘grave mistake.’

Better Markets Calls Bitcoin ETF a Huge Mistake

A nonpartisan nonprofit, Better Markets, renowned for lobbying stringent financial regulation, has submitted a comment letter to the SEC, urging the commission to reject the pending applications for a Bitcoin Spot ETF, just ahead of its anticipated approval next week.

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Dennis M. Keheller, the CEO and co-founder of Better Markets, asserted in his letter:

“It would be a grave if not historic mistake almost certainly leading to massive investor harm if the SEC approves the pending rule changes.”

Keheller emphasized that the spot Bitcoin ETF poses substantial risks to American investors and retirees, highlighting the speculative and volatile nature of Bitcoin and labeling it as “socially useless.” While his letter primarily criticized Bitcoin for its risky nature, one of Keheller’s key arguments was that the Bitcoin market is still immature and unprepared for an ETF, citing the potential for wash trading and the high concentration of Bitcoin among a few owners.

"The potential for fraud in the spot bitcoin market is so great that the rules of an exchange cannot permit the listing and trading of a spot bitcoin ETP and still be consistent with the requirement that the exchange’s rules be designed to prevent fraud and manipulation and protect investors and the public interest," The Better Markets CEO added.

Despite the SEC’s commitment to enhance surveillance over the Bitcoin spot ETF, Keheller argued that the commission’s oversight wouldn’t be sufficient. He also pointed out that the chosen custodian for the ETF, Coinbase, is not registered with the CFTC or SEC and only represents a small fraction of the global market.

Drawing attention to the SEC’s ongoing case with Coinbase, Keheller shared that the platform has been unable to prevent fraud and manipulation, labeling it an ‘indefensible mistake’ for the commission to collaborate with them.

On the Flipside

Better Markets has received endorsements from anti-crypto figures like Senator Elizabeth Warren.
Better Markets once notably rejected a $1 million donation from FTX.

Why This Matters

Better Markets remains steadfast in its stance against the crypto market. While its concerns may be valid, the perspective appears slightly conservative when considering the long-term potential of the crypto market. Nonetheless, as the SEC’s decision looms next week, the letter from Better Markets has the potential to cast a shadow on the prospects of a Bitcoin spot ETF, given the unpredictable nature of the commission.