NYSE Arca Seeks SEC Rule Change for Bitcoin ETF Listing
Following closely behind the CME and CBOE, which were the first exchanges to offer Bitcoin futures, NYSE Arca looks to make a similar move with its filing with the SEC on December 19 to propose a rule changing for allowance of listing two ETF’s (exchange-traded funds) tied to Bitcoin futures.
The two ETF’s of interest are the ProShares Bitcoin ETF and the ProShares Short ETF. The ETFs were originally proposed in September, with the rule change proposed on December 4.
ProShares is aimed to be priced at $25 per share, with a maximum aggregate offering price of $1 million. Like the Chicago offerings, none of them have direct exposure to cryptocurrency, and instead, make value by tracking the index of bitcoin prices from several exchanges.
“According to the Registration Statement, the investment objective of the Fund is to seek results (before fees and expenses) that, both for a single day and over time, correspond to the performance of lead month bitcoin futures contracts listed and traded on either [Cboe] or [CME],” the company wrote.
If bitcoin increases in value, so would any contracts associated with it. The opposite occurs as well of course. While not directly tied to bitcoin, this is a stepping stone for institutional investors and only a matter of time until Wall Street money flows into bitcoin in a more direct fashion.
The ETFs would track the future contracts with the Chicago-based exchanges, which made headlines for listing the first Bitcoin futures in December.
The SEC has historically denied requests for a rule change. NYSE Arcas has already requested a rule change to allow an ETF from SolidX, but that was shot down in March. Another ETF that the SEC turned down was the one from the Winklevoss Twins, but the SEC has already begun reviewing that decision after a request from the Bats BZX exchange.
With bitcoin garnering more attention and clout with every year that passes by, the SEC and other authority bodies will have to give into the increasing demand of investors big and small. What was done with CME and CBOE sets a precedence for the financial scene, and should help pave for the road for other ETF’s and Bitcoin-related futures.