According to those in the know, the SEC is likely to allow a US Bitcoin futures exchange-traded fund to go ahead. This would be the first time that such a fund is given the nod from regulatory authorities in the US.
With the knowledge that Bitcoin Futures ETFs will not be blocked from trading by the SEC, the Bitcoin price is riding high on the news. It was a breath away from $60,000 this morning, moving back to around $59,200 as at time of writing.
According to a Bloomberg article this morning on the subject, people who had asked not to be named said that the Proshares and Invesco Ltd. Bitcoin Futures ETFs filings will not be rejected by the SEC.
Gary Gensler, chair of the SEC, has already said that the mutual fund rules, on which the Proshares and Invesco Ltd. proposals are based, provide “significant investor protections”.
Since the Winklevoss twins filed the very first Bitcoin ETF all the way back in 2013, many have tried and failed to get approval. The SEC’s most used argument against approving any of these ETFs has been Bitcoin’s volatility.
Besides Bitcoin’s legendary price swings, the SEC has referred in the past to other potential problems for investors, such as possible price manipulation, and insufficient liquidity.
Also, to quote from Bloomberg:
“Additionally, the SEC has questioned whether funds would have the information necessary to adequately value cryptocurrencies or related products. There have also been questions about validating ownership of the coins held by funds and the threat from hackers.”
Most of the ETF futures speculation for Bitcoin has been caused by Gary Gensler of the SEC. The chairman has been quite anti Bitcoin and cryptocurrencies over the last few months, and has knocked the crypto market back on 2 or 3 occasions with his negative stance.
However, a couple of hints recently from Gensler, suggested that he would be open to Bitcoin futures exchange traded fund rather than a straightforward ETF. Many see this as the first step towards legitimacy for Bitcoin and the feeling is that a full ETF will follow in due course.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.