Advancement: Cryptocurrency ETFs are getting closer to becoming a reality, with SEC Chairman Gensler signaling in early August he is open to approving Bitcoin ETFs. These funds would be futures-based Bitcoin ETFs and not investment vehicles that directly track the cryptocurrency.
He said that the SEC would be receptive to futures-based Bitcoin ETFs rather than physical cryptocurrency assets if they follow a more stringent set of rules like mutual funds.
A Bitcoin futures mutual fund from ProFund began trading on the Chicago Merc (CME) in July after garnering SEC approval earlier this yer.
“As new technologies come along, we need to be sure we’re achieving our core public policy goals,” Mr. Gensler added. “In finance, that’s about protecting investors and consumers, guarding against illicit activity, and ensuring financial stability.“
Futures contracts are traded separately from the underlying asset they are derived from and allow traders to bet whether an underlying market will rise or fall.
Until recently, money managers were not pursuing approval of futures-based Bitcoin ETFs. But that reversed after Mr. Gensler’s August comments. About 12 asset managers have filed paperwork for futures-based Bitcoin ETF products. Major funds like ProShares, VanEck and Invesco filed applications within the last 2 wks.
Have a prosperous day, Keep the Faith!