Sunday, December 4, 2022

Cboe Asks SEC for Permission to Launch Six More Bitcoin-Based Funds

Cboe Asks SEC for Permission to Launch Six More Bitcoin-Based Funds

Just weeks after launching the world’s first bitcoin futures product, Cboe Global Markets has applied to the Securities and Exchange Commission (SEC) to list six more bitcoin-based funds. If successful, U.S. investors will finally have access to tradable Bitcoin ETFs, which have struggled to get regulatory approval so far.

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According to CNBC, the new contracts will be based on the performance of the futures product — making them a kind of futures bet on futures. The proposed names are:

  • First Trust Bitcoin Strategy ETF
  • First Trust Inverse Bitcoin Strategy ETF
  • REX Bitcoin Strategy ETF
  • REX Short Bitcoin Strategy ETF
  • GraniteShares Bitcoin ETF
  • GraniteShares Short Bitcoin ETF

The First Trust and REX applications said their funds will invest “primarily” in Cboe’s Bitcoin Futures but may also invest in other U.S. exchange-traded products, bitcoin derivatives, or even cash.

How Successful Are Bitcoin Futures Anyway?

The report noted Cboe said “several partners are very interested in moving forward with the development of an exchange-traded product” after seeing the success of its Bitcoin Futures.

Bitcoin logExactly how successful Cboe’s product — along with similar offerings from CME and TD Ameritrade — is for Bitcoin is still debatable at this stage. Whether correlated or not, the bitcoin price has dropped sharply since trading began.

Some fear that adding mainstream finance and big money to BTC price-based products (that don’t involve actual bitcoin) could encourage more dangerous speculation by outsiders with no real interest in the technology itself.

There were also reports that bitcoin futures trading activity was underwhelming, at least in the early days. On its most popular day, Cboe had a trading volume of 1,515 — compared to a similar “traditional” futures contract like VIX, which had 128,771.

Bitcoin investment pioneers Cameron and Tyler Winklevoss have long sought to list a bitcoin-based ETF, possibly even based on actual BTC holdings. However the SEC has been less accommodating, rejecting a rule-change application to list on the BATS exchange in April 2017. That decision may be reviewed at a future date.

Would you invest in any bitcoin-based futures product, or fund? Let’s hear your thoughts.

Images via Pixabay

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