SEC is expected to approve Bitcoin futures ETFs
According to Bloomberg News, US regulators are ready to allow the first US Bitcoin futures exchange-traded fund to begin trading, marking a watershed event for the crypto industry.
According to persons familiar with the situation, the Securities and Exchange Commission is prepared to allow the first U.S. Bitcoin futures exchange-traded fund to begin trading, marking a watershed moment for the cryptocurrency industry.
According to the persons who spoke on the condition of anonymity while discussing the decision, the regulator is unlikely to prevent the items from trading next week. Unlike prior Bitcoin ETF applications that were rejected by the SEC, ProShares and Invesco Ltd.’s plans are based on futures contracts and were submitted under mutual fund rules that, according to SEC Chairman Gary Gensler, provide “substantial investor safeguards.”
A spokesperson for the Securities and Exchange Commission, as well as a representative from ProShares, declined to comment.
Bitcoin almost reached $60,000, its highest level since April, as crypto-linked stock futures soared in premarket trade in the United States. The world’s most valuable cryptocurrency has risen about 90% in three months and is closing in on its all-time high of $64,869 established earlier this year.
The fund’s launch will be the climax of a nearly decade-long campaign by the $6.7 trillion ETF sector, barring a last-minute reversal. Since Cameron and Tyler Winklevoss, the twins best recognized for their role in the development of Facebook Inc., filed the initial application for a Bitcoin ETF in 2013, advocates have sought approval as a confirmation of popular acceptance of cryptocurrencies.
Issuers have been attempting to get a variety of various structures certified for trade for years, despite numerous misleading signals of progress and outright denials. There have been proposals for funds that would hold Bitcoin in a digital vault or employ leverage to boost returns over the years. Others attempted to reduce Bitcoin’s well-known volatility, which has been a source of dispute for the SEC.
The Securities and Exchange Commission (SEC) has previously claimed that the crypto industry is riddled with investment risks. The SEC was concerned that prices could be manipulated and that liquidity would be insufficient, as well as that Bitcoin’s wild price swings would be too much for small investors. Bitcoin’s last three full-year returns were 74 percent loss, 95 percent gain, and 305 percent gain. The SEC has also questioned whether funds would have the requisite information to properly value bitcoins or comparable items. There have also been concerns about proving ownership of coins held by funds, as well as the potential of hacking.
When Gensler was appointed to lead the agency, many crypto supporters rejoiced. They mentioned his previous involvement in the crypto sector, noting that he once taught a seminar named “Blockchain and Money” at MIT’s Sloan School of Management. However, in recent months, the chairman has referred to the market as the “Wild West” and stated that he wants more strong control.
In August, Gensler hinted that funds based on CME-traded Bitcoin futures registered under a 1940s statute would be preferred. Late last month, he reaffirmed his position.
This has resulted in a flood of futures-backed filings, as well as unrestrained hope among issuers that approval is on the way. The anticipation has spurred a meteoric rise in Bitcoin’s price, which has more than doubled since falling below $30,000 in late July.
Four futures-backed Bitcoin ETFs might start trading on US exchanges this month, with VanEck and Valkyrie’s application deadlines nearing. In the meantime, dozens more bitcoin exchange-traded products have debuted in Canada and Europe. Valkyrie remained silent.
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