Bitcoin ETFs On The Way

CBOE has filed six Bitcoin ETFs with the SEC. The battle for supremacy has just begun.

Financial institutions are now bidding for Bitcoin exchange traded funds (ETFs) with Bitcoin future contracts trading live in the market.

The New York stock exchange recently filed a proposal with SEC for two Bitcoin ETFs – the pro-shares Bitcoin ETF and the pro-shares short Bitcoin ETF. The two funds will be tracking the momentum in Bitcoin future benchmarks as provided by CBOE and CME, being not involved in investing in Bitcoin or holding the cryptocurrency.

After NYSE, it is the Chicago Board Options Exchange (CBOE) who last week, together with the Securities Exchange Commission (SEC), has filed for six different Bitcoin ETFs. Being the first one to launch Bitcoin futures contracts in the market, CBOE is optimistic about the emerging asset class.

Public records show that CBOE has proposed a few amendments to the rules to the SEC to allow the exchange to file for six Bitcoin ETFs. The amendments were submitted to the SEC between December 15 to 19. The list of six ETFs as filed by the CBOE include: Granite Shares Bitcoin ETF, Granite Shares Short Bitcoin ETF, Rex Bitcoin Strategy ETF, Rex Short Term Bitcoin Strategy ETF.

An insider from CBOE was quoted saying that he was upbeat about the success of the new business model and intimated that several partners have shown a keen interest in ETF products. The first trust filing reads that the fund ‘…intends to invest primarily in Bitcoin future contracts. It may also invest in other listed Bitcoin derivatives, OTC Bitcoin derivatives, US Exchange-Listed ETFs and non-US component stocks (collectively Bitcoin instruments)’.

Pushing ETF products to get approval by the SEC is a tall order given that the SEC has been extremely cautious to accept ETF proposals in the past. The pioneers of Bitcoin trading, Winkleross Brothers, Cameron and Tyler, despite making a billion-dollar fortune in Bitcoin trading, have received stiff opposition from SEC. They were the first to submit their bid which demonstrates that the SEC nod is not a walk in the park.

One key reason for rejection in the past is that Bitcoin future contracts were not launched then. With the future contract already live, there is a high possibility that the SEC might review its position on this matter.

CBOE has made its intention to bring Bitcoin into mainstream trading known. Speaking to Bloomberg back at the start of November 2017, CBOE President Chris Concannon, said his firm is quite optimistic about ETFs.

The past week has seen a lot of volatility in the market as Bitcoin prices slipped by more than 44% from an all-time-high of $20,000 to a low of below $12,000. The price of Bitcoin has, however, recovered a bit in the past 24 hours and is currently trading at $14,532.7.

The arrival of ETFs and other Bitcoin related products is expected to bring more legitimacy and reduce the extreme volatility in Bitcoin prices.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

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