On November 26, members of VanEck, SolidX and the Cboe BZX Exchange met with U.S. Securities and Exchange Commission (SEC) staff to present a new argument on why the Bitcoin (BTC) market is ready for an exchange-traded fund (ETF), Coindesk reported.

The proponents’ argument centered around the idea that the bitcoin market is mature enough to support an ETF, and at present looks similar to markets for other assets which already have such products. The presentation gave several examples of assets that already have ETFs, including crude oil, silver and gold.

The presentation specifically tied the idea of futures markets with spot markets, noting that for money substitutes such as gold and silver, this connection between the two can be proven with empirical evidence. Further, this type of price co-integration “is evidence of a well-functioning capital market.”

The companies went on to explain that “Similar to commodity futures, the spot and futures prices (of bitcoin) are tightly linked,” again providing “evidence of a well-functioning capital market.”

They argued that the bitcoin ecosystem is “less susceptible to manipulation” than other commodities which already support exchange-traded products.

For instance, insiders might possess or trade information related to the supply of physical commodities – say, if a new source for an asset is discovered, or if some event lowers the production – and this may impact price.

According to the presentation, Bitcoin does not face this sort of issue:

“The linkage between the bitcoin markets and the presence of arbitrageurs in those markets means that the manipulation of the price of bitcoin on any single venue would require manipulation of the global bitcoin price in order to be effective … Bitcoin therefore is no more susceptible to manipulation than other commodities, especially as compared to other approved ETP reference assets.”

Any attempt to manipulate bitcoin’s price “would require overcoming the liquidity supply of such arbitrageurs who are effectively eliminating any cross-market pricing differences,” especially as these arbitrageurs are likely to have their funds stored on different exchanges to take advantage of price differences.

The companies also highlighted Cboe’s matching engine and VanEck’s MVIS Bitcoin OTC Index as further benefits for a possible ETF.

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