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Despite delay CBOE President is Hopeful on Bitcoin ETF Prospects

CBOE Bitcoin ETF | Bitcoin ETF | Bitcoin | CBOE | SEC

SEC postponed its decision regarding VanEck/SolidX BTC ETF to list on CBOE, implying the commission’s doubts around a  bitcoin ETF. Previously, SEC has rejected an ETF proposal from Cameron and Tyler Winklevoss, owners of the Gemini Trust Co. cryptocurrency exchange, along with a solo proposal from SolidXPartners Inc. The SEC’s obvious concern is about possible manipulation in the largely unregulated cryptocurrency market.

Read more: The correlation between Bitcoin’s Price and Bitcoin ETF

CBOE ETF BID

In December, CBOE and fellow Chicago exchange CME Group Inc. began offering bitcoin futures contracts, marking the first significant bitcoin entries into mainstream finance. Such futures are traded in regulated markets and could provide the foundation for an ETF instead of the cryptocurrency itself.

The SEC has tiptoed around the issue and has not yet given a stock exchange permission to list a bitcoin ETF. CBOE’s ETF filing states that investment in Bitcoin will only be for the benefit of investors; it will facilitate over-the-counter trading among accredited market investors and insuring the funds that are invested in bitcoin. SEC has often shown concern about insufficient insurance for cryptocurrency investors.

Throwing some caution to the wind Concannon mentions that the futures will provide a more mature and healthier market, but no one knows the correct liquidity level as such products haven’t been tested yet. BTC futures trading volumes do not match the levels of commodities like oil or gold. The option to wait for additional liquidity to introduce an ETF also pose a dilemma. Despite ETF’s potential to raise the level of futures trading, it still continues to face resistance from the SEC if there is not sufficient liquidity in its underlying futures.

Meanwhile, other players are diving right in, like the New York Stock Exchange is planning to offer a physically-settled cryptocurrency futures contract by this year.

The Pioneer

Undoubtedly, the first ETF is expected to lead the market and Concannon affirms to the sentiment. Once an ETF is approved, the inflow of capital will continue, based on the precedent set by other ETFs. Whether Concannon’s hopes are borne out remains to be seen.

The futures contracts were introduced when bitcoin’s price was skyrocketing. Crypto enthusiasts took it as a sign that the Wall Street community was welcoming digital assets. The obvious next step was ETF, however, the bitcoin futures trading by CBOE and CME did not raise the levels as expected and the bitcoin price has taken a sharp downturn in 2018.

Concannon noted that the size of the cryptocurrency market is one-fifth that of Apple as publicity has outpaced trading volume

Arshmeet Hora

The idea of expressing one’s views and reviews through words is beyond intriguing. What started as a creative let out has now become a passion and a profession for Arshmeet K Hora. In her own words ” with every word, every article that I write, my passion towards this medium has grown stronger.”  Arshmeet covers latest crypto news and updates as well as what happening new revolving around Blockchain Technology.

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