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Cboe Files for the Listing of Six New Bitcoin ETFs Optimized to Track Futures Performance

Reading Time: 2 minutes by on December 29, 2017 Bitcoin, Finance, News, Regulation

In a move that underlines the company’s growing interest in the emerging new asset class, Cboe Global Markets have requested the United States Security and Exchange Commission (SEC) to list six bitcoin-related exchange-traded funds (ETF).

The six ETFs are:

  •         First Trust Bitcoin Strategy ETF
  •         First Trust Inverse Bitcoin Strategy ETF
  •         REX Bitcoin Strategy ETF
  •         REX Short Bitcoin Strategy ETF
  •         GraniteShares Bitcoin ETF
  •         GraniteShares Short Bitcoin ETF

The pace of the filing is indeed remarkable considering it comes just days after Cboe became the first major exchange to allow bitcoin futures trading.

Unlike all past bitcoin-centric ETF efforts, the six from Cboe are optimized to track the performance of futures instead of tracking the digital asset itself. This earlier approach, brought into the limelight by the long-running submission by Cameron and Tyler Winklevoss, failed to convince the SEC because of certain regulatory complications.

In March 2017, the Winklevoss twins appealed to the SEC to approve the COIN bitcoin ETF. Following a rather lengthy screening, the SEC turned down the proposal, thus putting a stop to the much-speculated first regulated bitcoin investment platform on a major stock market.

According to CoinCenter, a non-profit research body and cryptocurrency advocacy center, the primary reason behind the SEC’s decision was the lack of adequate regulations in many overseas crypto markets.

“The Winklevoss ETF proposal was rejected because the SEC found that the significant markets for Bitcoin tend to be unregulated overseas markets that are potentially subject to price manipulation,” Jerry Brito, the executive director at CoinCenter, said earlier in 2017.

“But this creates a chicken and egg problem. How do we develop well-capitalized and regulated markets in the U.S. and Europe if financial innovators aren’t allowed to bring products to market that grow domestic demand for digital currencies like Bitcoin?”

The SEC’s rejection was contradictory to what a large section of the bitcoin market and the finance industry was expecting. So naturally, shortly after the knock-back, the price of bitcoin dropped almost 30 percent to $900.

The global market has changed drastically since that decision, and so has the regulatory landscape watching over it. Many overseas markets like Japan and South Korea have imposed even more stringent regulations compared to the United States.

In fact, both these Asian economies have taken the initiative to implement a national licensing program for cryptocurrency exchanges by enforcing a strict KYC doctrine, as well as more robust Anti-Money Laundering (AML) policies.

Judging by the fact that bitcoin regulations in most major economies have evolved significantly over the recent months, along with Cboe’s success with the listing of bitcoin futures, it is extremely likely that the SEC would approve the new ETF within the next 12 months.

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