Bitcoin futures debuted on the Chicago Board Options Exchange (CBOE) Sunday, a move that many market observers expect will, at the very least, move forward the conversation regarding US-listed bitcoin exchange traded products, including ETFs.
Bitcoin was trading at more than $16,000 on Monday morning,
“In an interview, Edward Tilly, Cboe’s chief executive officer, said the exchange may use information gleaned from futures trading to make a case to the Securities and Exchange Commission (SEC) to allow bitcoin-linked ETFs and exchange-traded notes (ETNs),” reports CoinDesk.
Bitcoin exchange traded notes (ETNs) trading in Stockholm are finding success. XBT Provider, a unit of CoinShares, offers bitcoin and ethereum-based exchange traded notes denominated in euros and Swedish krona that trade in Stockholm. Those products are fairly new and proving successful in terms of adding assets.
At the end of November, the Stockholm-listed bitcoin ETN had $700 million in assets under management, a massive number for an exchange traded product trading in Sweden.
An ETN is a bond security. A issuing financial institution promises to pay ETN investors a return on a benchmark index before the ETN matures. Additionally, some ETNs provide current distributions to investors. Since ETNs are a type of debt security, investors will have to watch out for the credit worthiness of the issuing bank.
To date, bitcoin ETFs have not been approved by U.S. regulators. Several ETF issuers filed plans earlier this year for such products, but the plans were scrapped because, at the time of those filings, there was not a bitcoin futures market. That changed Sunday and CBOE rival CME is expected to launch bitcoin futures on Dec. 18th with Nasdaq following suit next year.
In late September, VanEck withdrew plans for a futures-based bitcoin ETF because, at the time, the Securities and Exchange Commission (SEC) said it would not approve a fund based on a product that does not exist. However, bitcoin futures could make their debut before the end of 2017.
However, VanEck’s MV Index Solution unit recently unveiled a broad swath of indexes tracking individual digital currencies and could launch four benchmarks offering broader exposure to cryptocurrencies.
“Earlier this year, the SEC rejected a proposed ETF by Gemini, the bitcoin exchange founded by Cameron and Tyler Winklevoss (which also has a multi-year license from Cboe to provide bitcoin data in the futures launched today). Among other concerns, the regulator cited the lack of other regulated bitcoin products,” according to CoinDesk.
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