US SEC Calls BTC Futures Safer Than Spot

The U.S. SEC has apparently flipped the word of advice about Bitcoin Futures being a greater risk than acquiring a real asset in hand.

The United States Securities and Exchange Commission explained in detail why it thinks that Bitcoin Futures are a much safer and secure option in comparison to Spot trading and markets.

Futures instead of Spot

The SEC had rejected a Bitcoin-based Spot EFT because the Bitcoin market didn’t show enough work in combatting fraudulent and criminal activities on the network in order to convince the SEC for approval.

In response to the SEC’s rejection, BZX for VanEck stated that globally popular cryptocurrency exchanges such as, Coinbase and Kraken already have quite the significant surveillance systems in order to combat criminal and fraudulent trade activity on the network, but the SEC issued a counter-statement, saying that even if we assume that certain platforms do have what it takes to tackle the issue of security, both the Custodian and the Exchange are not making any attempts to make sure “that only the Benchmark constituent platform’s power to detect and eliminate fraud would even matter”, without considering “other Bitcoin spot markets”.

The SEC did, however, grant the approval for a Bitcoin fiat Futures ETF, which came as a surprise to many, highlighting the SEC’s stance on the matter.

CME Bitcoin Futures ETFs

Talking about CME Bitcoin Futures ETFs, CME might have its own unique surveillance, but when it comes to Spot, even that level of surveillance is not viable enough to utilize. The SEC stated that even if the issue of surveillance is solved, the CME market isn’t big enough to handle more than billions of dollars in trading proportions, so for the value of Bitcoin to be controlled, CME is not a hurdle.

Steering Prices of CME Bitcoin Futures

The SEC does know about this because apparently, the SEC Chair, Gary Gensler, has friends at Goldman Sachs who trade spots when they desire to control the value of CME Bitcoin Futures. Since the CME Bitcoin Futures is a subordinate of Bitcoin, its price depends upon the fluctuation of the value of Bitcoin itself, so it makes them a good and much more secure alternative. So, even if the SEC were to take notice of such control of pricing and valuation, they wouldn’t have allowed Futures ETFs in the first place.