Earlier this month, a batch of ETF issuers withdrew plans for bitcoin ETFs, prompting investors to wonder when regulators would approve ETFs based on the digital currency.
Direxion, ProShares and VanEck are among a handful of ETF issuers that have withdrawn filings to launch bitcoin ETFs at the request of U.S. regulators. The Securities and Exchange Commission (SEC) requested the issuers withdraw their filings.
The news of the withdrawn plans for cryptocurrency ETFs comes just days after the SEC said it is soliciting comments from the investing public on two proposed rules changes that could prompt the long-awaited introductions of bitcoin ETFs.
Most market observers do not want to guess about the timing for when cryptocurrency ETFs could come to life, but a popular answer seems to be not anytime soon.
“Although several Bitcoin exchange-traded funds have been proposed, they’re unlikely to win U.S. regulatory approval soon, said Tom Farley, who oversees the New York Stock Exchange,” reports Bloomberg. “Fund companies withdrew applications for 12 cryptocurrency ETFs and 2 mutual funds this month after the SEC’s staff said it was worried about keeping investors safe.”
First Trust and VanEck are also among the issuers that withdrew plans for bitcoin ETFs.
Thus far, no exchange traded products related to digital currencies have been approved by U.S. regulators. Derivatives help increase liquidity and improve markets for an asset category by allowing investors to bet on ups and downs of an asset, evening allowing individuals to adopt market-neutral strategies. They are also a key component in the creation of many futures-backed ETFs utilized by a range of investors.
Bitcoin futures are currently live on Cboe and CME with Nasdaq still considering a launch of similar products later this year.
The Senate Banking Committee is expected to hold a hearing on bitcoin in February featuring leaders from the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC).
According to Bloomberg: “I saw a message that said this is not a mature asset class in the vein of the U.S. dollar or gold,” the president of NYSE Group Inc. said in a Thursday interview with Bloomberg Television at the World Economic Forum’s annual meeting in Davos, Switzerland. “If I had to guess, it’s a while. I don’t have timing, but it is not imminent.”
For more information on the cryptocurrency market, visit our Bitcoin category.