Many individuals and organizations believe that the launch of bitcoin-based futures markets have ‘opened the doors’ for bitcoin exchange-traded funds (ETF). Now that Cboe’s derivatives markets launched, new ETF filings have been sent to the U.S. Securities and Exchange Commission (SEC) from financial firms such as Vaneck and REX.
U.S. Regulators Revealed They Would Not Approve Certain ETFs Until Futures Products Existed — Now They Are Real
The idea of bitcoin exchange-traded funds has been a ‘holy grail’ mission for many bitcoin proponents and businesses. Many firms from the U.S. have applied to the SEC regulators office but have been either denied, or the company withdrew its application. Back in September news.Bitcoin.com reported on a few ETFs withdrawing their filings because the SEC revealed it would not review ETFs based on exchange traded bitcoin derivatives products until they exist.
“On a call with the [SEC] staff on September 20, 2017, the staff expressed the view that it is the Commission’s policy to not review a registration statement for a fund where the underlying instruments in which the fund intends to primarily invest are not yet available,” explained Vaneck at the time.
ETF Filings Sent to the EDGAR System Started This Week
However, now that Cboe has launched its futures instruments, and CME Group will begin its derivatives trading next weekend, ETFs are going to try for approval again. Cboe’s futures have been going wild and reached a high of $18,900 for contracts that expire in January on December 10 and 11. Vaneck applied for a bitcoin ETF the day after Cboe’s launch, and REX initiated its filing three days prior.
“Vaneck Vectors Bitcoin Strategy ETF (the “Fund”) seeks to achieve total return,” reveals the ETF summary which needs approval from both the SEC and the Commodity Futures Trading Commission (CFTC).
The REX funds will be called the Bitcoin Strategy ETF and the Short Bitcoin Strategy ETF which will utilize the principal listing exchange for each fund based off of the Cboe BZX index.
“The Funds are actively managed and are not expected to invest directly in bitcoin. As such, the Funds can be expected to perform differently from the performance of the bitcoin,” explains the REX filing. REX originally filed for the same ‘long and short’ funds back in August.
Although the REX Short Bitcoin Strategy ETF seeks to provide “short” exposure, the Fund does not promise or seek to provide any specific negative multiple of the performance of bitcoin or Bitcoin Derivatives (as defined herein) over any specified period of time.
Other filings will likely follow by re-filing again with the SEC and CFTC such as the Winklevoss attempt ‘COIN’ and the Proshares Trust II. The COIN fund was set to be listed on the Bats exchange but was rejected by U.S. regulators, and Proshares is attempting to have its ETF products sold on the New York Stock Exchange (NYSE). Now that futures markets have started to trade publicly, ETF filings may get a second chance at redemption from regulators.
What do you think about the ETFs trying for a second attempt? Do you think the futures markets have opened the door for these types of funds? Let us know in the comments below.
Images via Pixabay, SEC, Vaneck and REX logos.
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Author: Jamie Redman