When will the United States get its own spot Bitcoin ETF? How about never! elenahoolu, explains why the SEC is so reluctant to approve any applicants seeking to list a spot BTC ETF.
Correlation between Bitcoin ETPs and spot price suggest price disparities exist
The graphs below show the daily return comparison between each of the three ETPs and the aggregated Bitcoin spot price, calculated from the four exchanges using the volume-weighted median method. However, it is important to highlight that this is only a very rough comparison using the daily data. The difference in prices might be due to different cut-off time each ETP uses to calculate the end of day price, i.e. exchange traded products do not trade 24-hour like crypto spot price; they trade during the Exchange’s regular trading hours from 9:30 a.m. to 4:00 p.m.
The SEC is also concerned about the possibility of price influence and manipulation from spot platforms that are not included among the index’s constituents. If Bitcoin prices from other platforms are very different from the 4 constituent platforms , market manipulators might seek to exploit the disparities for profit.
The SEC’s concerns about fraud and manipulation seems to be justified based on the price disparities between these European listed ETPs and the spot price. That said, the difference could be caused by the daily data frequency used in this analysis, which is different from the high-frequency data used in practice.
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