SEC set to allow bitcoin futures ETFs

The regulator isn’t likely to block the products from starting to trade next week, said the sources.

NEW YORK: The Securities and Exchange Commission (SEC) is poised to allow the first US bitcoin futures exchange-traded fund (ETF) to begin trading in a watershed moment for the cryptocurrency industry, according to sources.

The regulator isn’t likely to block the products from starting to trade next week, said the sources.

Unlike bitcoin ETF applications that the regulator has previously rejected, the proposals by ProShares and Invesco Ltd are based on futures contracts and were filed under mutual fund rules that SEC chairman Gary Gensler has said provide “significant investor protections.” A spokesperson for the SEC declined to comment, as did an official at ProShares. Barring a last-minute reversal, the fund launch will be the culmination of a nearly decade-long campaign by the US$6.7 trillion (RM28 trillion) ETF industry.

Advocates have sought approval as a confirmation of mainstream acceptance of cryptocurrencies since Cameron and Tyler Winklevoss, the twins best known for their part in the history of Facebook Inc, filed the first application for a bitcoin ETF in 2013.

Approval has for years been out of the grasp of issuers who, amid myriad false signs of progress and outright rejections, have tried to get a variety of different structures cleared for trading.

Over the years, there have been plans for funds that proposed to hold bitcoin via a digital vault or that could use leverage to juice returns. Others sought to mitigate bitcoin’s famous volatility, a key point of contention for the SEC.

Bitcoin almost touched US$60,000 (RM250,000), the highest since April, while futures on crypto-linked stocks rallied in US premarket trading. The largest cryptocurrency by market value peaked at US$64,869 (RM269,855) earlier this year. — Bloomberg

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