Once again the SEC are seeking feedback on Bitcoin ETF’s (Exchange Traded Funds). In a recent development the Securities exchange commission (SEC) are seeking to obtain feedback from the public around Bitcoin ETF’s, which would enable investors a direct route into cryptocurrency trading.
The SEC are seeking public feedback on an application which has been submitted by the CBOE (Chicago Board Options Exchange). The application is for the following:
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of Proposed Rule Change to List and Trade Shares of SolidX Bitcoin Shares Issued by the VanEck SolidX Bitcoin Trust
The proposal came about following a partnership between VanEck, a money management firm and SolidX, a blockchain company. If approved CBOE will be looking to list and trade shares of SolidX Bitcoin shares which would be issued by the VanEck SolidX trust.
Who are CBOE?
The Chicago Board Options Exchange is the largest options market in the world. Founded in 1973, the exchange offers trading across multiple asset classes including; futures, options foreign-exchange markets and exchange-traded products (ETP’s). They also offer Bitcoin futures markets which are linked to the Gemini “auction price” for bitcoin”.
So far Bitcoin ETF’s have face a lot of scrutiny which has led to the the SEC calling for public feedback on numerous occasions. The SEC Director of Investment Management, Dalia Blass even published a letter in early 2018 highlighting a number of security issues surrounding “cryptocurrency-related” funds.
This has led to a number of Bitcoin-backed funds and Bitcoin ETF’s to be rejected by the SEC, including attempts by the Winklewoss twins.
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Are Bitcoin ETF’s Needed For “Institutional Money”?
One of the major beliefs amongst the cryptocurrency community is the belief that once “institutional money” enters the markets then there is no going back. It is largely argued that once said institutional money enters bitcoin and cryptocurrency markets then is could become a multi-trillion market.
If the SEC were to approve a Bitcoin-backed ETF then it would offer a vehicle for institutional investors to invest as well as providing the security and confidence in a developing market. If the SEC were to approve Bitcoin ETF’s then it would also mean approved third parties were in charge of storing and securing funds, meaning insurance policies would be in place and a huge risk factor may be eliminated from the industry.
Any move from the SEC is likely to put Bitcoin on global trading stage. Stock markets, retirement funds even individuals would have a much easier way to invest in digital money. Should institutional money enter the markets it is likely to cause a huge surge in cryptocurrency prices, which would offer potentially enormous returns to early investors.
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