What You Need to Know
- Within the past 24 hours, ProShares and Invesco have registered plans with the SEC for funds based on futures.
- These ETFs would require that investors put down a substantial amount of money on margin to trade, among other issues.
- CoinShares, for instance, says its approach is to "wait and see."
A few days ago, U.S. Securities and Exchange Commission Chair Gary Gensler signaled that regulators may be more open to a Bitcoin ETF if it was based around futures rather than the cryptocurrency itself. Fund managers are already putting that to the test.
Within the past 24 hours both ProShares and Invesco have registered plans with the SEC for funds based on futures.
The filings for the ProShares Bitcoin Strategy ETF and Invesco Bitcoin Strategy ETF could well be the first of many. As regulators drag their feet on allowing a U.S. cryptocurrency exchange-traded fund, applications have been piling up.
ProShares and Invesco are among more than a dozen issuers who have filed for ETFs investing in digital assets directly.
“With Gensler indicating the SEC is more likely to approve a futures-based Bitcoin ETF over a physical one, the race is on to offer such products,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA. “There is pent-up demand for a U.S.-listed Bitcoin ETF. We expect to see more filings in the coming days.”
In remarks to the Aspen Security Forum on Tuesday, Gensler said that an ETF that complies with the SEC’s strict rules for mutual funds could provide investors with necessary protections.
“I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures,” he said.
Following Gensler’s announcement earlier this week, many crypto backers voiced distress over the chairman’s preferred structure. An ETF focused on Bitcoin futures would require that investors put down a substantial amount of money on margin to trade, among other issues. Many have been hoping for a physically-backed Bitcoin instead.