Bitcoin ETFs are considered to be the holy grail in terms of attracting institutional investors. For now, it seems highly unlikely such an ETF will launch anytime soon, but we have Bitcoin futures to keep us busy in the meantime. If it were left up to the New York Stock Exchange, however, a few Bitcoin ETFs would be introduced in the near future. A formal filing with the SEC has been made to list two ProShares Bitcoin exchange-traded funds.
Can Bitcoin ETFs Finally Come Through?
Earlier this year, a lot of people had high hopes that the SEC would finally approve Bitcoin ETFs. Unfortunately, that didn’t happen. The lack of active regulation and the mounting Bitcoin price volatility have not made things easier in this regard. Solving the regulatory challenge is easier said than done, yet it seems it will happen well before Bitcoin becomes a nonvolatile asset.
At the same time, it is this volatility which makes Bitcoin so attractive to speculators and investors. It is an integral part of Bitcoin’s charm these days, yet it hinders one’s chances of successfully launching an ETF. Then again, the New York Stock Exchange has filed with the SEC to trade not just one, but two different Bitcoin ETFs in the near future. It’s a remarkable request, although the effort may finally pay off this time.
More specifically, the exchange has filed with the SEC to list two funds. One fund is the ProShares Bitcoin ETF, whereas the other one is the ProShares Short Bitcoin ETF. As the names suggest, both options allow investors to speculate on the Bitcoin price. More specifically, they are linked to Bitcoin futures contracts, which have become somewhat popular with mainstream investors over the past few days.
While most people may not know ProShares, the company manages over US$29 billion in assets. It also filed the necessary Bitcoin ETF documentation with the SEC in September of this year. It seems these funds are designed to track both of the Bitcoin futures provided by CBOE and CMO, as they are the only two companies that officially offer such products to the masses right now. Moreover, the funds will invest assets in benchmark futures contracts with the option of investing in additional contracts as well.
As is always the case with developments like these, there has to be a custodian of the funds in question. It seems this role will be played by Brown Brothers Harriman. It will oversee investment assets and cash equivalents. Furthermore, this institution will also take care of regulatory filings. It is a very interesting approach to Bitcoin ETFs, even though it remains to be seen how things play out. We can only hope the NYSE receives the green light from the SEC in the next few weeks.
It is evident Bitcoin has received a healthy boost throughout 2017. That’s not just thanks to the price increase, but also to the official launch of Bitcoin futures two weeks ago. More and more people want exposure to Bitcoin’s price volatility over the coming weeks and months, but it remains to be seen how this venture plays out. If the SEC grants approval to the NYSE, things will get a lot more interesting for the world’s leading cryptocurrency.