The much-followed Bitcoin ETF saga reaches yet another climax this week as the ProShares Bitcoin ETF proposal is set to be reviewed by the US Securities and Exchange Commission by August 23rd. For those of you living under a rock for the last two months, a number of firms have been racing to gain SEC approval for the world’s first Bitcoin ETF listing. This story has been gaining major traction across global news outlets, as the approval of a Bitcoin ETF would represent a major leap forward in legitimizing crypto on the world financial stage.
The ProShares Bitcoin ETF proposal was first filed in December of 2017. If approved, the ETF’s performance would be tracked on popular exchanges like the Cboe and CME. While not being connected to actual Bitcoin holdings, the ProShares Bitcoin ETF would derive its value from Bitcoin futures contracts and their performance on the aforementioned exchanges.
The SEC’s decision this week will be final, and if approved, would give many traditional investors the ability to invest into the cryptocurrency market through Bitcoin futures contracts.
ProShares is a US-based trading company specializing in ETFs. In contrast to the recently rejected Winklevoss Bitcoin ETF proposal, ProShares has the added advantage of being a long-respected ETF trading platform in the global financial sector.
Suggested Reading : Learn more about Bitcoin in our ‘What is Bitcoin?‘ beginner’s guide.
2/ These ETFs are important: they’re the first ones that the SEC will approve or deny in 2018 & will set the stage for others in coming months.
Of course, nobody knows what the SEC will decide, but we can use their recent statements to figure out what factors they’ll consider.
— Jake Chervinsky (@jchervinsky) August 17, 2018
Other notable competitors in the race for Bitcoin ETFs include VanEck, who in partnership with SolidX, had their joint ETF decision postponed to next month. VanEck has since been actively working to garner SEC support for its approaching decision. In July, the company published a detailed letter listing the supposed benefits for Bitcoin ETFs. The letter argues that the cryptocurrency industry would be greatly served by further regulation in the space.
“While one cannot rule out manipulation in the underlying spot market, we believe that, due to the diversified ownership and volume of trading, the market does not have major, structural vulnerabilities,” writes VanEck. “The Commission’s increased enforcement and regulatory actions can reduce the number of bad actors in a basically sound market. A regulated fund is a natural extension of this.”
These sentiments were echoed by SEC Chairman Hester Peirce, who voted in favor of the Winklevoss Bitcoin ETF last month. ‘Crypto Mom’, as she is now commonly called, wrote in a public statement of dissent last month that she thinks the SEC has overstepped its bounds in basing its decision for rejecting the Winklevoss Bitcoin ETF on concerns surrounding instability in the greater cryptocurrency market.
“I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market,” writes Peirce. “More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order. More generally, the Commission’s interpretation and application of the statutory standard sends a strong signal that innovation is unwelcome in our markets, a signal that may have effects far beyond the fate of bitcoin ETPs.”
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