Rumors are flying. The SEC may approve a Bitcoin Futures ETF before the end of the year. It looks like the US Securities and Exchange Commission will not pass on the legendary Bitcoin ETF yet … or ever, but a few companies are hiding in a new option. What does this mean? And why before a Bitcoin Future ETF for assets? That’s what we’re here to explore.
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But first, why is the SEC hesitant to approve Bitcoin ETFs? Investopedia Responds:
“The reason is that Bitcoin, the world’s largest cryptocurrency by market capitalization, remains largely unregulated. In addition, the Securities and Exchange Commission (SEC) is reluctant to allow ETFs to reach the public in the new and widely tested cryptocurrency market.
If this is true, do we think that a Bitcoin Future ETF is not only possible, but imminent? Okay, chairman of the SEC last month Gary Gensler told the Aspen Security Forum:
“I expect that there will be filing regarding Exchange-Traded Funds (ETFs) under the Investment Companies Act (’40 Act). Combined with other federal securities laws, the ’40 Act provides protection to significant investors.
In light of this important protection, I look forward to reviewing such filing staff, especially if they are limited to this CME-traded Bitcoin futures.
– Eduardo Prospero (edprospero23) September 23, 2021
Is Bitcoin Future ETF Wanted by US Investors?
From sending such a clear signal to Gary Gensler, The financial world has responded Mix.
“At least four asset managers have applied for ETFs that invest in Bitcoin futures, as indicated by Gary Gensler, chairman of the Securities and Exchange Commission earlier this month. But investors may not want their physically supported Bitcoin ETFs, analysts say.
According to Investopedia, “A Bitcoin ETF mimics the value of a digital currency, allowing investors to buy ETFs without having to trade Bitcoin.“However, Bitcoin, who is interested in ETFs when assets are widely available? Some investors or groups cannot invest in Bitcoin simply because their own internal rules do not allow them. They cannot buy Bitcoin through a brokerage account. No financial institution supports this. No, so no one protects them, and, of course, there is the risk of instability.
Bloomberg Bitcoin explains how to fix this:
“A bitcoin ETF can help overcome those restrictions because the format is widely accepted.” There are all sorts of safeguards and regulatory barriers for large financial institutions, “said Ross Mayfield, an investment strategy analyst at Robert W. Baird & Co. For financial institutions. ”
However, it appears that the SEC will not approve one soon. Why would they approve a Bitcoin Futures ETF instead? Bloomberg continues:
“For SEC purposes, bitcoin futures also provide an additional level of security because they are managed by the Chicago Mercantile Exchange and require investors to exchange cash in margins, as collateral.”
BTC price chart 09/27/2021 on Coinbase | Source: BTC/USD on TradingView.com
Experts and key players disagree
While some companies can’t wait for Bitcoin Future ETFs to become available, others are less enthusiastic. One of them is Michael Sonenshein, CEO of Grayscale Investments. His company is one of many to apply for the Bitcoin ETF and is still waiting for approval. Inside In a recent CNBC interview, He said:
“The SEC’s approach will be to allow futures-based products to enter the market before spot products,” Sonenshein told CNBC’s “Squawk Box” on Tuesday. “They really should allow both products to enter the market at the same time and investors should choose which way they want.”
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Of course, he has invested heavily in these results. His company’s Grayscale Bitcoin Trust is incredibly successful, but if they manage to turn it into an ETF, it could be surreal. However, he is not the only one who thinks that way. In a Bloomberg article, another expert elaborates on the limitations of Bitcoin Future ETFs:
“With futures-based products, you’ve introduced additional costs, more complexities, you have futures contracts that need to roll,” said Gerasi of the ETF store. “It’s a sub-optimal option for investors.”
Whatever the case, Bitcoin Future ETF approval is just speculation. Gary Gensler said he was looking forward to reading his staff reviews about Feelings, which is no guarantee in any part of the fantasy.
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