The cryptocurrency community is eagerly awaiting the decision of the U.S. Securities and Exchange Commission (SEC) on whether to approve or reject the applications of up to 12 spot Bitcoin exchange-traded funds (ETFs). These products would allow investors to gain exposure to the price of Bitcoin without having to buy or store the digital asset directly.
The SEC has been reluctant to approve Bitcoin ETFs in the past, citing concerns over market manipulation, investor protection, and regulatory clarity. However, some experts believe that the agency may be more open to the idea now, as the crypto market has grown in size, maturity, and legitimacy.
The SEC Chairman, Gary Gensler, has indicated that he is more favorable towards ETFs that track Bitcoin futures contracts rather than spot prices, as futures are regulated by the Commodity Futures Trading Commission (CFTC). However, he has not ruled out the possibility of approving spot Bitcoin ETFs, saying that he is reviewing each application on a case-by-case basis.
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The SEC has set deadlines for several spot Bitcoin ETFs in November and December, which means that the agency will have to either approve, deny, or extend the review period for these products by then. Some of the applicants include VanEck, Valkyrie, WisdomTree, NYDIG, and Bitwise.
If the SEC approves any of these spot Bitcoin ETFs, it would be a historic milestone for the crypto industry, as it would signal the recognition and acceptance of Bitcoin as a legitimate asset class by one of the most influential regulators in the world. It would also likely boost the demand and price of Bitcoin, as more institutional and retail investors would be able to access the market through a regulated and convenient vehicle.
However, if the SEC rejects or delays the applications, it would be a setback for the crypto community, as it would indicate that the agency is still not comfortable with the idea of allowing investors to trade Bitcoin through an ETF. It would also dampen the hopes and expectations of many crypto enthusiasts who have been waiting for years for a spot Bitcoin ETF to launch in the U.S.
The SEC’s decision on spot Bitcoin ETFs will have a significant impact on the future of the crypto industry and the adoption of Bitcoin as a mainstream asset. Therefore, it is important to keep an eye on the developments and updates from the agency in the coming weeks and months.
However, investing in a spot Bitcoin ETF also comes with some risks that investors should be aware of. Some of these risks are:
Volatility: Bitcoin is known for its high price fluctuations, which can result in significant gains or losses for investors. A spot Bitcoin ETF would reflect the movements of the underlying asset, which means that investors would be exposed to the same volatility as if they owned Bitcoin directly.
Liquidity: A spot Bitcoin ETF would depend on the availability and efficiency of the spot market for Bitcoin, which may not always be reliable or accessible. If there are disruptions or delays in the trading or settlement of Bitcoin transactions, it could affect the performance and pricing of the ETF.
Regulatory uncertainty: The legal status and treatment of Bitcoin varies across different jurisdictions and may change over time. A spot Bitcoin ETF would have to comply with the rules and regulations of the SEC and other authorities, which may impose restrictions or requirements on its operations or holdings. Additionally, there is no guarantee that the SEC will maintain its approval of any spot Bitcoin ETF or that other regulators will follow suit.
Operational risk: A spot Bitcoin ETF would involve various parties and processes to ensure its proper functioning and security, such as custodians, auditors, administrators, brokers, and exchanges. Any failure or breach in these systems could result in losses or damages for the ETF and its investors.
Social media doesn’t even make the list of 22,607 industries by the US Census Bureau
If you think social media is a big deal, think again. Social media doesn’t even make the list of 22,607 industries by the US Census Bureau. That’s right, the agency that tracks the economic activity of every sector in the country does not recognize social media as a distinct industry. Why is that? And what does it mean for the future of social media?
The US Census Bureau uses a system called the North American Industry Classification System (NAICS) to categorize every business establishment in the US, Canada, and Mexico. The NAICS assigns a six-digit code to each industry, based on its primary economic activity. For example, the code for newspaper publishers is 511110, while the code for internet publishing and broadcasting and web search portals is 519130.
The NAICS is updated every five years to reflect changes in the economy and technology. The latest version, NAICS 2017, was released in October 2016 and became effective in January 2018. The next update, NAICS 2022, is expected to be released in October 2021 and become effective in January 2023.
The NAICS does not have a code for social media because it considers social media as a subset of internet publishing and broadcasting and web search portals (519130). This means that social media platforms such as Facebook, Twitter, Instagram, YouTube, TikTok, and others are grouped together with websites such as Google, Netflix, Amazon, Wikipedia, and others.
This may seem surprising, given the popularity and influence of social media in our society. However, the NAICS is not designed to capture the cultural or social aspects of industries, but rather their economic activities. According to the NAICS definition, internet publishing and broadcasting and web search portals are establishments that “publish and/or broadcast content on the Internet exclusively or operate web sites that use a search engine to generate and maintain extensive databases of Internet addresses and content in an easily searchable format”.
From this perspective, social media platforms are similar to other websites that publish and/or broadcast content on the Internet. They generate revenue from advertising or subscription fees, they use algorithms to rank and display content, they collect and analyze user data, they employ software engineers and web developers, etc.
However, this does not mean that social media is insignificant or irrelevant. On the contrary, social media has many unique features and challenges that distinguish it from other types of websites. For example:
Social media platforms allow users to create and share their own content, rather than just consuming content produced by others. Social media platforms facilitate social interactions and connections among users, rather than just providing information or entertainment.
Social media platforms have a large impact on public opinion, political discourse, social movements, cultural trends, and personal identity. Social media platforms face complex issues such as content moderation, misinformation, hate speech, privacy protection, cyberbullying, addiction, mental health effects, etc.
These features and challenges require specific attention and regulation from policymakers, researchers, educators, journalists, activists, and users themselves. Therefore, it may be useful to have a separate category for social media in the NAICS or other classification systems.
However, creating a new category for social media is not a simple task. There are many questions and difficulties involved in defining what constitutes social media and how to measure its economic activity. For example:
How do we define social media? Is it based on the type of content (text, images, videos), the type of interaction (likes, comments, shares), the type of network (friends, followers), or something else? How do we distinguish social media from other types of websites that also have some social features? For example, are online forums, blogs, podcasts, online games, e-commerce sites considered social media? How do we account for the diversity of social media platforms in terms of size, scope.
social media is not currently considered as a separate industry by the US Census Bureau, but rather as a part of internet publishing and broadcasting and web search portals. This may change in the future, as social media platforms become more prominent and influential in our society. Creating a new category for social media would have both benefits and drawbacks for social media businesses and users, depending on how the category is defined and implemented. Therefore, it is important to have an informed and inclusive discussion on this topic among all the stakeholders involved.
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