Federal Regulators Greenlight Trading of Bitcoin-Linked Securities, Delighting Investors and Infuriating Cryptocurrency Critics
Plus: Cuba violates the rights of peaceful protesters, New Zealand leads the world in zoning reform, and more...
Federal regulators are allowing new bitcoin-tied securities onto the market, marking a major milestone for the cryptocurrency industry. On Tuesday, the ProShares Bitcoin Strategy Exchange-Traded Fund (ETF) started trading on the New York Stock Exchange.
The launch of this new fund—which will allow investors to purchase a package of bitcoin futures contracts—saw the price of the cryptocurrency rise 4 percent to a near all-time high of $64,000. Cryptocurrency news site Decrypt reports that five other Bitcoin ETFs have applications pending with the SEC. Provided the agency doesn't explicitly reject them, all of them could be trading by early November.
Longtime bitcoin boosters described the launch of the first bitcoin ETF as an unqualified success that only portends bigger and better things for the digital currency.
"The ETF approval is a watershed moment for the industry," said Brock Pierce, of the semi-defunct Bitcoin Foundation, in a statement to CNN Business. "Today begins an era…and serves as further validation of Bitcoin and cryptocurrencies across the country and on a global basis."
Other cryptocurrency investors were a little more measured in their reactions.
Bitcoin's rise to close to its record price is "related to the growing belief as the trading day goes on that this is going to be considered a successful launch," said Stephane Ouellette of FRNT Financial Inc., a crypto-focused capital-markets platform, to Bloomberg. "Given the amount of avenues retail investors already have to participate in BTC, clearly the U.S.-based ETFs are nonetheless satisfying some kind of latent, even if niche, demand."
Others were far less excited about the launch. SEC Chair Gary Gensler, a Biden appointee and bitcoin critic, cautioned investors on CNBC that cryptocurrency was "still highly speculative asset class" and that the new ETF "still has that same aspect of volatility and speculation."
Some progressive groups, meanwhile, are fuming that Gensler allowed the Proshares ETF at all.
"Bitcoin and other cryptocurrencies have already sucked an insane amount of money from the real economy," Bart Naylor, financial policy advocate at the consumer group Public Citizen told Politico. "Enabling more gambling under the banner of the SEC debases what's supposed to be the gold standard of world securities markets oversight."
These dueling reactions highlight the awkward position bitcoin finds itself in at the present moment. Its wider acceptance among institutional investors and individuals alike is also fueling demands for tougher, tighter regulation.
Sen. Elizabeth Warren (D–Mass.) had characteristically demanded that the SEC "step up to address [cryptocurrency's] regulatory gap."
Some Republicans, meanwhile, are positioning themselves as defenders of Bitcoin. Sen. Cynthia Lummis (R–Wyo.) told Reason earlier this year that "it provides great freedom to people who are living in hyperinflation or repressive governments."
FREE MINDS
Communist Cuba's treatment of dissident demonstrators suggests it's not the workers' paradise many had believed. A new report from Human Rights Watch found that the Cuban government "has systematically engaged in arbitrary detention, ill-treatment of detainees, and abuse-ridden criminal prosecutions in response to overwhelmingly peaceful anti-government protests in July 2021."
From the report:
Human Rights Watch has documented human rights abuses including arbitrary detentions, ill-treatment in detention, and abusive criminal proceedings against 130 victims in 13 of Cuba's 15 provinces, as well as in Isle of Youth, a small Cuban island considered a "special municipality." Between July and October Human Rights Watch interviewed by phone more than 150 people, including activists, victims, their relatives, journalists, and lawyers with direct knowledge of the cases; reviewed case files, fines levied against protesters, press reports and publications by Cuban rights groups; and corroborated photos and videos.
Officials involved in the abuses include members of the intelligence services, known in Cuba as "state security;" the military; the national police; and the special national brigade of the Interior Ministry, known as "black berets." Government-organized groups of civilians known as "rapid response brigades" were also involved in several beatings. Prosecutors and judges, who lack independence from the government, enabled and took part in abusive criminal proceedings.
FREE MARKETS
Its COVID policies might leave something to be desired in the liberty department, but New Zealand is now leading the world in free market housing reform. Yesterday, New Zealand's Labour-led government, with the support of the conservative opposition, introduced a new bill that would require larger "Tier 1" cities in the country to allow three-story, three-unit homes on all residential land citywide, reports Stuff. Another bill also introduced yesterday would allow even denser housing in select urban areas.
Efforts to legalize these "missing middle" housing options in response to high housing costs have been gaining momentum here in the U.S. Earlier this year, the California Legislature legalized duplexes on most residential land across the state. Oregon passed a similar bill ending single-family-only zoning in 2019.
Individual cities have adopted their own liberalizing reforms, although their effects have been muted by the retention of a lot of red tape and regulation.
Let's hope New Zealand can avoid those mistakes.
QUICK LINKS
- Maryland officials have a new solution to their wild zebra problem. More zebras!
- Almost all Los Angeles public school teachers have been vaccinated, which the Los Angeles Times credits to a requirement that they get the jab or lose their jobs. One wonders if making it easier to fire teachers could be used to improve their actual teaching as well.
- Another California recall is in the cards. Earlier this week, an effort to recall members of San Francisco's school board members qualified for the ballot, reports Politico.
- The Washington Post reports that members of the Biden administration considered calling in the National Guard to get Los Angeles' port moving.
- In the Wall Street Journal, investor Clifford Asness argues that the real target of President Joe Biden's tax plans isn't the idle super rich but rather productive, wealthy workers.
- Argentina is expanding price controls to combat runaway inflation. It's a novel idea that just might work.
Problem solved! https://t.co/MHf86N0tNM
— Scott Lincicome (@scottlincicome) October 20, 2021
