Bitcoin Trading Applications Snagged at SEC
An effort to allow investors to trade digital currencies as easily as stocks stumbled when backers withdrew 2 proposals to list Bitcoin funds.
Intercontinental Exchange Inc.’s (ICE) NYSE Arca exchange Wednesday withdrew an application with the US Securities and Exchange Commission (SEC) to list Grayscale Investments LLC’s Bitcoin Investment Trust.
Also Wednesday, Van Eck Associates Corp pulled a registration document for a Bitcoin fund after saying the SEC told them they would not review the filing until futures contracts on the digital currency start trading.
The Bitcoin Investment Trust is currently traded “OTC” in less formal exchanges than those used for typical stocks and at far higher prices than the Bitcoin it holds.
Shares traded down 3.2% to $715.50 Thursday, far higher than the issuer’s appraisal that its Bitcoin assets are worth 386.60/share.
GBTC shares gained nearly 500% YTD, more even than the 332% rise of Bitcoin to more than 4,100.
Bitcoin can be used to move money with relative anonymity, and without the need for a central authority, such as a bank or government.
In March, the SEC blocked 2 potential Bitcoin products, including one backed by Cameron and Tyler Winklevoss, twin investors best known for feuding with Facebook Inc (NASDAQ:FB) founder Mark Zuckerberg. CBOE Holdings Inc.’s Bats exchange, which wanted to host that exchange-traded fund, has appealed the ruling.
Bitcoin-tracking products already trade in Europe and 1 is being considered in Canada.
Regulators have not weighed in on 2 other efforts to bring a digital currency to US exchanges, including a proposal filed Wednesday by ProShare Capital Management LLC for a fund that would short Bitcoin futures, betting their prices will fall.
The SEC declined to comment. NYSE could not be reached.