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SEC Faces Thursday Deadline for ProShares Bitcoin ETF Decision

Less than a month after delaying a decision on a bitcoin-based exchange-traded fund (ETF), the U.S. Securities and Exchange Commission (SEC) is poised to approve or disapprove another pair of proposed ETFs. 

Officials at the U.S. securities regulator are set to make a decision on the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF by Thursday, August 23. Unlike this month’s earlier decision to push an approval for the Cboe’s VanEck/SolidX bitcoin ETF, this rule change proposal – filed by ProShares in conjunction with NYSE Arca – cannot be delayed any further under the regulator’s rules.

The ProShares ETF proposals – initially submitted to the SEC last December – are underpinned by bitcoin futures contracts, rather than any physical holdings of bitcoin itself. In other words, the ETF’s value will be determined by the bitcoin futures contracts trading on CME or the Cboe Futures Exchange, according to the original filing.

ProShares originally proposed the futures-based ETFs in September 2017, but noted at the time that the futures market was young and “there can be no assurance that an active trading market for bitcoin futures contracts will develop or be maintained,” according to the filing.

The ProShares Trust previously asked the SEC to withdraw a proposed rule change filed on Dec. 19, 2017 which outlined the ProShares Bitcoin and Short Bitcoin ETFs, as well as the ProShares Bitcoin Futures/Equity Strategy ETF and the ProShares Bitcoin/Blockchain Strategy ETF.

The withdrawal request came after the SEC pushed back against a number of ETF proposals, citing concerns about bitcoin’s volatility at the time. Direxion Shares, VanEck and First Trust Advisors also withdrew a number of similar bitcoin ETF proposals at the time.

However, the SEC later announced it was considering the futures-pinned proposals at the end of January.

To date, the regulator has only denied or delayed bitcoin ETF proposals, with the latest denial coming last month when it rejected a proposal filed by Gemini founders and long-time bitcoin investors Cameron and Tyler Winklevoss.

The proposal had already been rejected in the spring of 2017, but the Bats BZX Exchange, which submitted the proposal, filed an appeal that was later heard by SEC commissioners. 

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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SEC Delays Decision on Asset Manager's Bitcoin ETFs Until September

The U.S. Securities and Exchange Commission (SEC) has delayed making a decision on whether to approve five bitcoin-related exchange-traded funds (ETFs) until September, public documents reveal on Tuesday.

In the latest edition of the Federal Register, the SEC explains that it is postponing any decision over the possible approval of ETF proposals filed by Direxion Investments in January – one of which is directly related to bitcoin’s price and four of which are based on the cryptocurrency’s price movements.

The SEC states:

“The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission, … designates September 21, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change.”

The SEC added that it only received two comments on the proposed ETFs.

While the crypto community largely seems excited at the prospect of a bitcoin ETF, Atlantis Asset Management chief investment strategist Michael Cohn said any approval would be “insane,” CNBC reports today.

“Then they’re putting a rubber stamp on it as an asset, and I don’t think governments want to go there yet. It just seems as though it’s not something I’d want to put my clients into in any way, shape or form. You can only be embarrassed,” he added.

Notably, none of the ETF proposals being postponed are from VanEck and SolidX, which are currently under discussion by the wider crypto community. More than 100 comments have been submitted for that proposal, and a decision may occur as soon as next month.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Is This The Beginning of Another Bitcoin (BTC) Bull Run?

$6,900 per Bitcoin (BTC) is the current magic number when you ask any seasoned Crypto-trader in the crypto-verse. This is because they believe that once this resistance level is broken by the King of Crypto, we could be seeing BTC values get to a new zone of between $7,600 and $8,000. BTC is currently trading at $6,717 and up 3.34% in the last 24 hours. If its current momentum continues, we could be breaking the $6,900 ceiling very soon.

Several technical analysis experts have done a good job of analyzing the general direction of the price of Bitcoin in the coming months. But technical analysis goes hand in hand with current events that affect the crypto-markets.

Bitcoin ETF Factor

The general mood and feel from crypto-enthusiasts, is that the SEC will approve the Bitcoin ETFs filing by the CBOE. This is due to the fact that previous ETFs were filed during a period when the rest of the world had not shown signs of regulating the industry. At the moment we have the following countries that have passed laws and/or expressing their will to do so: Malta, South Korea, Japan, Canada, Germany, Thailand, Philippines, just to name a few.

This means that the SEC has seen the global progress of crypto adoption as an investment option and will approve the Bitcoin ETFs. The exact date of an SEC decision is not known, but many believe it will be in August.

BlackRock effect

Just yesterday, the news of the BlackRock investment firm exploring blockchain and cryptocurrencies, caused a spike in the price of Bitcoin (BTC). The value of BTC rose from the levels of $6,200 to those of $6,600 in less than 24 hours. The momentum is still there for BTC is now valued at $6,717.

Other institutional investors

The institutional investors are slowly trickling in to invest in the crypto markets. Coinbase has even introduced its Custody service to securely store the digital assets of high net individuals and the said institutional investors.

One good example of the entry of institutional investors, is the declaration of the Swiss based stock exchange of SIX that they will be creating a crypto-trading platform.

Coinbase effect

The Coinbase cryptocurrency exchange has just received the go-ahead to become a government-licensed broker-dealer platform in the United States. This means the exchange can now list digital assets that are classified as ICO tokens. More investors in the United States will now be able to invest in the numerous ICO tokens available, further boosting the volume of the entire crypto markets. Perhaps this is a new avenue for XRP to be listed on the exchange?

In conclusion, the technical analysis of Bitcoin (BTC) had indicated the King of Crypto had been over-sold last week and a rise in value was imminent. The additional news of BlackRock, Coinbase and Bitcoin ETFs might be the news needed to confirm a new Bitcoin Bull Run in the second half of 2018.

Disclaimer: This article is not meant to give financial advice. It is an opinion piece. The opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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Is August 10th D-Day for the Bitcoin ETFs Filed by the CBOE at the SEC?

In an online article only 2 days ago, it was mentioned that August 10th is when the SEC will decide on the fate of the filing of Bitcoin ETFs done by the CBOE exchange. The article was quoted as saying:

Bitcoin ETF fate is finally going to be decided on August 10. Currently, SEC is asking for comments on the listing and trading of Bitcoin ETF introduced by VanEck SolidX Bitcoin Trust that will be catering to only accredited investors.

However, this date has been disputed as being the proverbial D-Day for the decision on the Bitcoin ETFs by the American SEC. The date of August 10th was apparently calculated using an SEC statement that says that a decision will be reached on each filing no less than 45 days from the date of publication in the Federal Register.

Wording from the notice indicates that:

Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding.(ii) as to which the Exchange consents, the Commission will: (a) By order approve or disapprove such proposed rule change, or (b) institute proceedings to determine whether the proposed rule change should be disapproved.

The notice was dated June 26th but published on July 2nd. The August 10th date was reached by adding 45 days to the June 26th date. Therefore, there is high chance that we might have to wait a bit longer than August 10th given the statement highlighted above from the published notice.

So what can we do till then?

Continue sending comments to the SEC as earlier mentioned in the following ways:

Please note that the file number for the BTC ETFs on the SEC website is SR-CboeBZX-2018-040.

  • Online form
  • Comments can be submitted via this link
  • Look for SR-CboeBZX-2018-040
  • There should be a Submit comments section
  • Email
  • Send comments to [email protected].
  • The subject line of your message must include the File Number for the rule. This is the number that begins “S7-” or “SR-”.
  • If you attach a document, indicate the format or software used (e.g., PDF, Word Perfect, MS Word, ASCII text, etc.) to create the attachment. Please note that the SEC now accepts comment letters in PDF format. DO NOT submit attachments as HTML, GIF, TIFF, PIF, ZIP, or EXE
  • Using the traditional ‘Snail Mail’

    Send 3 copies of your paper comment letter to:

    Brent Fields, Secretary
    Securities and Exchange Commission
    100 F Street, NE
    Washington, DC 20549-0609

    Each copy must list the “File Number” for the rule. This is the number that begins “S7-” or “SR-”.

Disclaimer: This article is not meant to give financial advice. It is an opinion piece. The opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.

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VanEck, SolidX Join Forces in New Bid to Launch Bitcoin ETF

Investment firm VanEck has partnered with financial services company SolidX in the latest attempt to launch the first bitcoin exchange-traded fund.

The companies announced Wednesday that they would list a “physically-backed bitcoin ETF that will be insured against loss or theft of bitcoin.”

Under the arrangement, VanEck will market the ETF, while SolidX will act as sponsor, according to a press release. The companies noted that both have previously filed individually to list bitcoin ETFs on various stock exchanges.

VanEck chief executive Jan van Eck said bitcoin is “a legitimate investment option, as a type of ‘digital gold’ that may make sense for investors’ portfolios.”

The CEO noted that the ETF has not yet been created, saying “We’re pleased to join with [SolidX] in supporting the effort to bring a physically-backed bitcoin ETF to market.” When asked by CoinDesk, he declined to provide details on what assets would be used to back the fund.

Neither SolidX nor VanEck has succeeded in launching a bitcoin ETF to date. As previously reported by CoinDesk, both companies withdrew previous attempts at launching the products at the request of the U.S. Securities and Exchange Commission.

Van Eck expressed optimism about the fund’s potential, despite the regulatory obstacles they have faced, saying:

“We believe that collectively we will build something that may be better than other constructs currently making their way through the regulatory process. A properly constructed physically-backed bitcoin ETF will be designed to provide exposure to the price of bitcoin, and an insurance component will help protect shareholders against the operational risks of sourcing and holding bitcoin.”

If approved by regulators, the new ETF would be listed on the CBOE BZX Equities Exchange, according to the release.

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Cboe Prods SEC on Bitcoin ETF Approval in New Letter

A senior executive for Cboe Global Markets believes that the market could support the launch of a bitcoin exchange-traded product (ETP), according to a new letter sent to the U.S. Securities and Exchange Commission.

Chris Concannon, the firm’s president, didn’t directly push the agency to approve such a product. Rather, he cited data collected by the company through its launch of bitcoin futures late last year to make the argument that the market is moving toward being able to support an ETF.

His letter was a response to a January release from the SEC, in which it outlined its concerns over approving an ETF, citing market fragmentation and investor protection shortfalls in particular.

In his response, Concannon noted that although they are young, the bitcoin commodity markets “are developing quickly,” which is promising for future exchange-traded products (ETPs).

Concannon added:

“While the the current bitcoin futures trading volumes on Cboe Futures Exchange and CME may not currently be sufficient to support ETPs seeking 100% long or short exposure to bitcoin, Cboe expects these volumes to continue to grow and in the near future reach levels comparable to those of other commodity futures products at the time that they were included in ETPs.”

Furthermore, he wrote that he sees the markets for government-issued currencies and gold as being “probably more fragmented” than cryptocurrency markets, noting that “there are a lot of venues to access currency markets.”

“While Cboe shares many of the concerns raised in the Staff Letter, we believe that the vast majority of these concerns can be addressed within the existing framework for commodity-related funds related to valuation, liquidity, custody, arbitrage, and manipulation,” the letter noted.

Bitcoin and markets graph image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.