Road To Bitcoin ETF Still Difficult Amid SEC Concerns

Until the SEC address concerns regarding “liquidity and valuation” of bitcoin futures, it asked firms to hold on to their plans for bitcoin ETF.

Road To Bitcoin ETF Still Difficult Amid SEC Concerns
Road To Bitcoin ETF Tangled In Concerns Of SEC

Many U.S. companies rallied up to bring bitcoin exchange-traded funds (ETF) into the market. However, they had to put their plans on the shelves for some time as US Securities and Exchanges Commission (SEC) raised concerns. The plans to launch the cryptocurrency in the retail market has gained steam owing to the 1,500 percent surge over the past year.

However, it is expected that SEC will keep a close eye on firm entering the bitcoin trading. Fund managers teamed up with a proposal to consider ETF based on bitcoin, but SEC has pushed their proposals back. It has applications regarding at least 14 different bitcoin ETFs, according to regulatory filling. In March, it rejected application for ETF from owners of the Gemini bitcoin exchange, Cameron and Tyler Winklevoss.

Rafferty Asset Management LLC manages the Direxion and intends to list leveraged funds in an attempt to twofold bitcoin’s daily price moves. The firm, on Monday, revealed that the SEC raised concerns about the “liquidity and valuation” of bitcoin futures contracts. The firm outlined that SEC asked for withdrawal of its application till the time it addresses those concerns.

On Tuesday, Van Eck Associates Corp., ProShare Capital Management LLC, and First Trust Advisors LP confirmed in filings that staff of SEC asked them to hold on to their plans for some time for bitcoin ETFs.

According to analysts, the race to launch bitcoin funds would heat up in the future as fund managers would take necessary steps amid concerns of SEC and redesign their funds in compliance with regulator.

“This is being driven by retail demand,” said Axel Merk, Founder And Chief Investment Officer of Merk Investments, which introduced a physically backed gold ETF back in 2014. “If people are enthusiastic about bitcoin, then people are going to try to market a bitcoin ETF.”

Several funds have been examined the past fillings and ready to rush for their bitcoin ETF launches.


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