Perspective: Bitcoin ETF to Expose More Investors to Market Manipulation and Fraud Risks

Former US Securities and Exchange Commission (SEC) official John Reed Stark has expressed negative views on a Bitcoin spot ETF, stating that cryptocurrencies have no intrinsic value and are only used for criminal activities. He believes that a Bitcoin spot ETF would bring fraud and market manipulation risks to ordinary investors and should not be approved.

Cryptocurrency ETF Should Not Be Approved
Cryptocurrencies Have No Intrinsic Value
Cryptocurrencies Have No Positive Use Cases
Issues with Bitcoin Spot ETF
Another Fee Structure
Another Ponzi Scheme
Another Predatory Inclusion
Another Concealed Intent
Current Bitcoin Rebound is False
Related Companies Bankrupt and Unsettled
Tether Minting
Market Manipulation by Whales
State of Anarchy
Please Tell Me Bitcoin ETF Is Not Real
John believes that cryptocurrencies have no intrinsic value, no cash flow, no earnings, no employees, no management, no balance sheet, no products, no services, no operational records, and no analytical valuation. Other than analysis related to cryptocurrency speculation, there is no other data to refer to.

The reasons for the rise in cryptocurrency prices are twofold:
Because there is no regulatory body to prevent market manipulation
Because people can sell cryptocurrencies to more gullible individuals

Therefore, cryptocurrencies have been severely overvalued, and everything will collapse when there are no more greater fools to buy in.

Cryptocurrencies only have one proven practical use – for criminal activities, such as terrorism, money laundering, sanctions evasion, ransomware attacks, drug trafficking, child pornography, human trafficking, and espionage. And now, the SEC wants to approve a Bitcoin spot ETF?

If a Bitcoin spot ETF is approved by the SEC, it would be a disaster for the market because it would bring:
Currently, the institutions applying for Bitcoin spot ETFs in the market are just a group of opportunistic financial giants who shamelessly design and manufacture products to allow more investors to experience bankruptcy and incalculable risks, while enriching themselves.

Although the proponents of Bitcoin spot ETFs advocate for including individuals without bank accounts into the financial ecosystem, the reality is quite the opposite. Cryptocurrencies are not only more expensive and complex than mainstream finance, but they are also a massive Ponzi scheme.

Cryptocurrencies are just another example of predatory inclusion and affinity fraud. They are sold to deceive vulnerable and disgruntled individuals, offering more unequal financial services to historically marginalized groups. At first glance, cryptocurrencies give opportunities to the vulnerable under the guise of inclusivity, but in reality, it only worsens their situation. Cryptocurrencies do not solve the historical problems of inclusive finance.

On the other hand, the current functions of cryptocurrencies do not align with the needs of their target audience. Instead, they bring many risks and drawbacks, thereby undermining the benefits of cryptocurrencies.

The concept of Bitcoin spot ETF is ridiculous because it is just another Wall Street investment scam and a huge money-making plan, possibly the most centralized crypto asset. Wasn’t Bitcoin created to pursue decentralization?

The proponents of Bitcoin spot ETFs cite the recent rise in Bitcoin prices as evidence that Bitcoin is an important investment and that ordinary investors should be able to easily access Bitcoin.

But John believes that this is a carefully planned trick, and he has identified four real reasons for the recent rise in Bitcoin prices:
In the past few years, numerous major cryptocurrency bankruptcies, including FTX and Three Arrows Capital, have led to a significant reduction in Bitcoin supply, resulting in a supply-demand imbalance and an increase in Bitcoin value.

However, these supply-demand imbalances are temporary. These locked-up Bitcoins will be liquidated and dumped into the market at some point in the future, which will lower the value of Bitcoin.

Tether has created 5 billion USDT out of thin air in the past month as a form of air loans, backed only by the loans themselves or cryptocurrencies as reserve assets. They have issued “fake dollars” to some major clients without actual US dollars entering the system.

Cryptocurrency institutions, including exchanges and hedge funds, can use this method to increase leverage and boost cryptocurrency prices, then use the inflated cryptocurrencies as collateral to borrow more USDT and continue this operation.

Approximately 10,000 individuals own 30% of Bitcoin, and 100,000 individuals own 50% of Bitcoin. It can be seen that the cryptocurrency market is a market with very low liquidity. Those involved do not disclose their transactions, and there is no transaction transparency, regulatory checks, or audits. Market manipulation is prevalent and not surprising.

Whales can manipulate prices through large buy and sell orders. Such behavior triggers a domino effect in the entire market, affecting the emotions and reactions of traders and investors. Therefore, whales manipulate the price and supply of tokens to create the desired market reaction, greatly affecting the liquidity and price stability of cryptocurrencies. There are countless methods to control the Bitcoin market.

For traditional financial companies registered with the SEC, the SEC has absolute and immediate control over all aspects of their operations. However, the SEC lacks this supervision and access in the Bitcoin market, lacking the ability to detect, investigate, and prevent fraudulent activities. This causes the Bitcoin market to operate in a regulatory vacuum, making it impossible for the SEC to discover individual misconduct and enforce violations.

The Bitcoin market is full of fraud and manipulation, which means approving these products will expose millions of American investors and retirees to the harm that the SEC aims to prevent.

On the other hand, approving Bitcoin spot ETFs will lead to the re-packaging of the entire cryptocurrency industry. Cryptocurrency industry players can claim or imply that their products are now approved by the US government and will undoubtedly market heavily to Americans, implying that the SEC’s actions have legalized cryptocurrencies and giving retail investors a false sense of security.

Approving the SEC is a mistake. The investment risks of Bitcoin have been apparent and repeatedly occurred in the past three years, resulting in billions of dollars in losses. Investors in Bitcoin spot will face the same market fraud and manipulation risks as direct Bitcoin holders, and the SEC should not expose investors to these risks.

Chairman Gensler has been firmly committed to protecting investors, maintaining fair, orderly, and efficient markets, and promoting capital formation from the beginning of his term. But now, this former Wall Street banker seems to have found his destiny and may end his tenure with a dramatic and tumultuous twist.

Gary, please tell me this is not true…

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