In an interview with CNBC, SEC Chairman Jay Clayton said that while there are concerns that need to be addressed prior to clearing the runway for a Bitcoin-based exchange-traded fund (ETF) launch, there is “progress being made.”
Various firms like VanEck have tried to push through a Bitcoin ETF, but the SEC cited issues, such as price manipulation as a primary obstacle in getting a cryptocurrency-related fund approved.
“An even harder question given that they trade on largely unregulated exchanges is how can we be sure that those prices aren’t subject to significant manipulation?” Clayton asked. “People needed to answer these hard questions for us to be comfortable that this was the appropriate kind of product.”
Clayton’s comments come ahead of two possible approvals or rejections for Bitcoin ETFs—one from Bitwise Asset Management and the other a joint effort from VanEck and Solid X. Both proposals were submitted late last year, but subsequent postponements have pushed the decision back.
Are we any closer to seeing a Bitcoin ETF some day? SEC Chairman Jay Clayton to @CNBC: “yes, but there’s work left to be done” @SEC_News @bobpisani @kellycnbc @CNBCTheExchange #bitcoin #crypto pic.twitter.com/iJP3nn9XHc
— The Exchange (@CNBCTheExchange) September 9, 2019
In the meantime, the VanEck SolidX Bitcoin Trust launched, but it has yet to gain traction among investors. Per a report by Coin Telegraph, “Data from the company, spotted by economist and cryptocurrency commentator Alex Krüger on Sept. 10, showed that since its launch at the start of the month, VanEck SolidX Bitcoin Trust 144A Shares total net assets are only $41,400.”
While investors wait for a possible Bitcoin ETF, they can look to other areas like mobile payments for possible opportunities.
Institutional investors are already jumping on board the mobile payments sector. Per a Tech News Observer report, “Other institutional investors and hedge funds have also made changes to their positions in the company. FMR LLC grew its stake in shares of ETFMG Prime Mobile Payments ETF by 8,022.2% in the 1st quarter. FMR LLC now owns 731 shares of the company’s stock worth $31,000 after purchasing an additional 722 shares during the last quarter. Wells Fargo & Company MN increased its position in shares of ETFMG Prime Mobile Payments ETF by 215.5% in the second quarter.”
Finance Sector ETF Plays
While Bitcoin continues its uphill battle towards legitimacy in the financial sector, ETF traders in the meantime can check out leveraged plays within the industry. Some big banks are expressing concern with respect to the possibility of rate cuts by the Federal Reserve through 2019.
In particular, profits could shrink as a result of lower interest rates, which could put the Direxion Daily Financial Bear 3X ETF (NYSEArca: FAZ) in play. FAZ seeks daily investment results that equate to 300% of the inverse (or opposite) of the daily performance of the Russell 1000® Financial Services Index.
The fund invests in swap agreements, futures contracts, short positions or other financial instruments that, in combination, provide inverse or short leveraged exposure to the index equal to at least 80% of the fund’s net assets. The index is a subset of the Russell 1000® Index that measures the performance of the securities classified in the financial services sector of the large-capitalization U.S. equity market.
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