The United States’ financial regulator finally approved a cryptocurrency ETF. However, the Bitcoin futures ETF fell short of what some cryptocurrency purists want: a fund that holds crypto directly.
The Securities and Exchange Commission (SEC) of the United States finally approved the ProShares Bitcoin Futures Exchange Traded Fund (ETF); it is the first time the financial markets watchdog has approved a cryptocurrency-linked ETF. The long-awaited (ETF) was slated to start trading Monday, October 18, 2021. ProShares CEO Michael Sapir said:
“2021 will be remembered for this milestone […] Investors who are curious about crypto but hesitant to engage with unregulated crypto exchanges want “convenient access to Bitcoin in a wrapper that has market integrity.”
Access indirect access to the cryptocurrency market by investing in Bitcoin futures
For the last ten years, traditional finance firms and crypto entrepreneurs have sought permission to launch Bitcoin ETFs in the United States. However, the SEC delayed their applications of kept them pending indefinitely. The ETF approval will now enable institutional investors to access indirect access to the cryptocurrency market by investing in Bitcoin futures. Investors will get exposure to Bitcoin without holding the cryptocurrency directly via any ordinary brokerage account.
The ProShares’ ETF will list under the ticker $ BITO and trade on the New York Stock Exchange. This latest development doesn’t come as a surprise, as SEC Gary Gensler has said on numerous occasions that the regulator prefers approving an ETF that tracks Bitcoin futures.
Still expecting the US SEC to approve a Bitcoin ETF tracking Bitcoin’s spot price
The SEC has been wary of approving ETFs that track Bitcoin’s spot market due to its fear of price manipulation within the crypto space. The regulator said investors are safer when they invest in Bitcoin futures ETF over the regular Bitcoin ETFs. Douglas Yones, the NYSE’s head of exchange-traded products, said all was not lost as he foresees a range of crypto-linked ETFs getting approval, eventually. He added:
“This is an exciting step but not the last.”
While the United States SEC is still dragging its feet and reviewing the Bitcoin and Ether ETF applications on its table, some institutional investors looked for opportunities elsewhere. For instance, Ark Invest, seeking to invest in ETFs tracking Bitcoin’s spot market, is currently doing so via the Canadian stock exchange. Canada and Brazil have approved a few Bitcoin and Ether ETFs over the past few months. The crypto sphere is still expecting the US SEC to approve a Bitcoin ETF tracking Bitcoin’s spot price.
Tom is a long-serving freelance writer who specializes in the blockchain and cryptocurrency niche. You may even call him a crypto-enthusiast with over 10-years’ experience in content creation, blog writing, and SEO. He is a philosophical figurehead who believes that to make our world a better place, we must invest in incorruptible products and procedures, of which Bitcoin and other cryptocurrencies are leading examples.