With a number of issuers of prospective Bitcoin/cryptocurrency-related exchange traded funds (ETFs) withdrawing applications for said ETFs since the beginning of this week, questions as to the ability of funds to successfully achieve a bitcoin ETF remain.
After receiving letters from the Securities and Exchange Commission which expressed concern with regards to the "liquidity and valuation" of the underlying assets proposed to underpin the ETF (namely, futures related to bitcoin, not bitcoin itself), a number of firms have withdrawn applications for said ETFs at the regulator's request.
Hope for a bitcoin ETF may not be lost, however, as the SEC just released two rule change proposals which could potentially allow for a Bitcoin ETF. The Chicago Board Options Exchange (CBOE) has applied for exemptions relating to the market manipulation rules which cover ETFs and other asset classes, citing the unique nature of Bitcoin and the cryptocurrency market.
Given the volatility of cryptocurrencies in general, I expect to see whichever ETF eventually comes into being to be a very interesting short-term speculative trade for investors looking to gain access to bitcoin via ETF. While a host of other more well-diversified ETFs are available, a Bitcoin-related ETF would definitely be the one to watch in the near-term, should the exemptions be granted and an ETF comes to fruition in the next few weeks.
Invest wisely, my friends.
