What Have We Learned So Far About ETFs In The COVID-19 Crisis?

Courtesy of Ryan Clements Exchange-Traded Funds (ETFs) are at the heart of the COVID-19 financial crisis.[1] Over forty percent of the trading volume during the mid-March selloff was in ETFs (multiple times the percentage in January), making them the “tool of choice” for many crisis traders.[2] Using ETFs to trade through a crisis makes sense […]

Safe Until They Aren’t? Investigating Liquidity Illusions in the Exchange Traded Fund Market

Since the 2008 global financial crisis (GFC) exchange traded funds (ETFs) have experienced remarkable growth.[1] A recent Bloomberg report pegs the worldwide ETF market at over $5.3 trillion (up from $700 billion pre-GFC) with the U.S. accounting for nearly 70 percent of its size.[2] The number of available products has grown exponentially.[3] Product variety seems […]

Can a Cryptocurrency Self-Regulatory Organization Work? Assessing Its Promise and Likely Challenges

The U.S. regulatory framework for cryptocurrency (including federal securities compliance,[1] spot exchange registration,[2] and new derivative product listings[3]) continues to slowly evolve as government agencies increase their familiarity with the technology and dissect its associated risks.[4]  Nevertheless, despite recent guidance statements issued by the Securities & Exchange Commission (SEC); the Commodity Futures Trading Commission (CFTC); […]

Blockchain is Overhyped

Courtesy of Lawrence Baxter, Ryan Clements, and John Lightbourne The buzz surrounding Blockchain, the distributed ledger infrastructure upon which Bitcoin operates, and how it will transform commerce while reducing transaction costs is at a crescendo. As John Oliver recently hilariously lampooned, many investors assign instant value to any firm with Blockchain in its name, mirroring […]

If We Can, Does It Mean That We Should? Volatility Linked ETPs and The Recent Crash

Market participants around the world are still reeling from this week’s wild ride that saw major U.S. indexes drop more than 5% and the Dow Jones Industrial Average swing by at least 1,000 points in all but one day. Early causal assessments pointed to the threat of rising interest rates and inflation, political uncertainty in […]

Why a Bitcoin Bubble is a Good Thing

Courtesy of Lee Reiners, Ryan Clements, and Sean Semmler In the late 1990s, it was widely understood that Beanie Babies – a line of miniature stuffed animals – were in the midst of a speculative bubble. At one point, Beanie Babies made up 10% of eBay’s sales and over 60% of American households owned at […]

The Case for a Cryptocurrency Market Bubble

Courtesy of Lee Reiners, Ryan Clements, and Sean Semmler Predicting the future price of Bitcoin and other cryptocurrencies is a fool’s errand. If you believe otherwise, take a look at BitcoinObituaries.com, which provides a running list of articles from publications such as The Economist and The Wall Street Journal that proclaim the end of Bitcoin […]

New CFTC Primer Casts Uncertainty on Unregulated Utility Token Market. Is This An Application of Goodhart’s Law?

On July 25th, the Securities and Exchange Commission (SEC), citing the long established “Howey Test”[1] and other cases,[2] determined that a public offering of digital tokens known as “the DAO” was in fact an offering of securities that was subject to federal law. While this ruling temporarily quelled an otherwise raging initial coin offering (ICO) […]

Decoding The Demand For Cryptocurrency: What Is Driving The Historic Price Surge?

2017 has been the year of cryptocurrency – with Bitcoin, Ethereum and other popular digital currencies experiencing unprecedented growth.  Bloomberg recently reported that the price increase in Bitcoin and Ethereum (respectively 358 and 4000 percent) has been “staggering” considering “[t]ech stocks rose just over 1000 percent over the entire course of their [late-’90s] bubble.” As […]

Is an ICO a Sale of Securities? An Analysis of The DAO Offering

Initial Coin Offerings (also referred to as “ICOs” or “token sales”) are presenting new challenges for regulators in determining the application of securities laws. Until recently, the ICO market was unrestrained by law or regulation; inhibited only by investor appetite. But last month, the Securities and Exchange Commission (SEC), threw cold water on the ICO […]