Just after CBOE, the Chicago-based exchange, launched Bitcoin futures, two firms have filed applications for bitcoin ETFs that trade in crypto derivatives. CryptoCoinsNews just reported that, according to the SEC public filing system, the commission has received new applications for both REX Bitcoin Strategy ETF and REX Short Bitcoin Strategy ETF, as well as VanEck Vectors Bitcoin Strategy ETF.
REX filed the application on 8th December and VanEck Vectors on 11th of December. According to the report from CryptoCoinsNews, “neither firm intends to hold bitcoins directly; rather, the actively-managed funds will trade futures contracts and other derivatives products to enable investors to profit from the price movements of the flagship cryptocurrency.”
The Winklevoss twins and couple more financial institutions filed applications for different types of bitcoin ETFs, but SEC turned them all down. The major worry was that bitcoins are unregulated and the approval of ETFs will only add “clouds to the blue sky” in the financial world. With much speculation that bitcoin may be the biggest bubble of all, SEC was reluctant to grant the launch of a Bitcoin ETF.
Another reason why SEC has denied to accept the product is that bitcoin derivatives were not in existence, so an ETF based on these was impossible. Now, with the launch of bitcoin futures, and with Nasdaq also planning to launch these in 2018, SEC may be approving the first bitcoin ETFs very soon.
What the bitcoin ETF will do as a product is give access to retail investors to put their funds into bitcoin through brokerage and retirement accounts. While this idea of putting one’s retirement money into bitcoin, a product slammed by many as a “fraud” and a “bubble”, the possibility of it going mainstream and being found in multiple investors’ wallets and horizons is getting stronger and stronger.