Issuers of ETFs remain eager to launch ETFs tied to bitcoin, the largest digital currency by market value, and it probably is not a stretch to say many investors are eagerly awaiting the debut of such products.
Figuring out when U.S. regulators will finally give the nod to bitcoin-related ETFs is another matter altogether. Bitcoin futures debuted on the Cboe in December, followed by a launch on the CME. Nasdaq Inc. is still considering entering the bitcoin futures competition. Previously, market observers and industry experts expected the debut of bitcoin futures to facilitate the launch of bitcoin ETFs, but that has not been the case.
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.
Patiently Waiting for Bitcoin ETFs
“The prospect of a Bitcoin ETF has been widely discussed for the last few years, and despite all previous applications for a US-based fund being rejected or withdrawn, the latest rhetoric from the SEC appears to suggest the commission is ready to consult with industry stakeholders, who may be able to address their concerns such that a viable Bitcoin ETF can finally come to fruition in 2018,” reports CoinJournal.
Direxion, ProShares and VanEck are among a handful of ETF issuers that have withdrawn filings to launch bitcoin ETFs at the request of U.S. regulators.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 formal consultation process which was initially started at the end of 2017, is essentially a request for industry stakeholders to provide comments to address the handful of points of contention over Bitcoin ETFs, specifically regarding fair valuation, sufficient liquidity, effective pricing arbitrage and asset custody,” according to CoinJournal.