SEC Concerns – Funds Withdraw Planned Bitcoin ETFs

Two US fund providers have withdrawn their planned Bitcoin index funds after the concerns of the responsible US stock exchange supervisory authority SEC became known yesterday. However, the current listing application of five so-called Exchange Traded Funds (ETFs) of the provider Direxion Asset continues.

Update of the Bitcoin revolution

In the meantime, the fund providers Exchange Listed Funds and ProShares have withdrawn their proposals for Bitcoin ETFs in addition to Direxion Asset. Read more about it here: Is Bitcoin Revolution a Scam? Read This Review Before You Sign Up! However, the index funds are not yet completely off the table. The SEC is currently conducting a public hearing on the ETF proposals of the Chicago options exchange CBOE. According to Bitcoin revolution mandatory publications, a total of at least 14 ETFs and other Bitcoin-related exchange products hope for a green light from the SEC.

If the supervisory authorities grant permission to the ETF variants of Windy City, Wall Street providers could also regain their hope in the Bitcoin index funds.

After the Securities and Exchange Commission’s (SEC) concerns became public in yesterday’s investigation documents, the two fund providers Rafferty Asset Management and Exchange Traded Concepts filed the launch of three planned Bitcoin ETFs.

This was reported by the news agency Reuters about the Bitcoin loophole

The reason for this is obvious concern from the documents with regard to the “liquidity and valuation” of the Bitcoin index funds: As BTC-ECHO reports, the application for approval from the provider Direxion Asset is currently continuing. This week, Direxion Asset applied for the listing of five Bitcoin loophole ETFs on the New York secondary exchange Arca Exchange.

The index funds enable customers to bet not on the Bitcoin price itself, but on the trading value of the Bitcoin futures on the US CBOE and CME exchanges. Last December, these had apparently effortlessly launched their future contracts oriented towards the quasi-leading currency. With the planned Bitcoin ETFs, it should now be possible to double leverage prices on the New York Stock Exchange. This means that gains of up to twice the futures growth are possible with them.

As Business Insider reports, however, this is cause for concern. For example, experts say it may be too early for the onion-like stratification of future contracts. The still young Bitcoin market could lead to a decoupling of the ETFs from the underlying Bitcoin price.

Unlike futures, index funds are not dependent on the Commodity Futures Trading Commission (CFTC), but on the approval of the SEC. The latter’s concerns thus contradict the admission of the CFTC and represent a rare example of the opposition of various exchange authorities.

In addition to the current listing application, the New York investment bank Cantor Fitzgerald and the largest electronic stock exchange NASDAQ are planning their own future contracts for the current year. The breakthrough of Bitcoin on Wall Street, probably the world’s best-known and most important hub of international financial markets, is therefore not on ice.

Index funds or ETFs are generally understood to be stock market investments that refer to the performance of an equity index such as the DAX or Dow Jones. ETFs are often available at low cost from providers and enable investors to invest in entire markets rather than in individual stocks. Bitcoin ETFs would enable financial transactions outside the actual trading of the currency. Their listing on the US stock exchanges would be a further decisive step towards mainstream establishment of the crypto currency on the financial markets.