CBOE requests U.S. regulators to move ahead with bitcoin ETFs
The exchange operator CBOE (Chicago Board Options Exchange) Global Markets made a statement that the U.S. securities regulators should not pose an as obstacle in the way of exchange-traded funds that hold cryptocurrencies like bitcoin from coming to the market as they are essentially the same as other ETFs that hold commodities.
Back in January, the U.S. Securities and Exchange Commission said that “significant investor protection issues” needed to be examined before bitcoin-based ETFs could be offered and it also had concerns around how the products would be priced, stored and safeguarded.
A CBOE’s letter signed by CBOE President Chris Concannon said the exchange believes
“that the vast majority of these concerns can be addressed within the existing framework for commodity-related funds related to valuation, liquidity, custody, arbitrage, and manipulation.”
Bitcoin that can be moved around the world quickly without any centralized authority such as a bank or government. The a virtual currency’s 1,500 percent surge last year stoked investor demand.
ETFs would give investors a more transparent and accessible way to get exposure to cryptocurrencies than the spot market, CBOE believes.
Although the bitcoin price has been highly fluctuating, swinging from a 2018 high of $17,234.99 on Jan. 6 to a low of $5,920.72 on Feb. 6, and trading on Monday at about $8,092. The SEC has been cautious due to several massive cybersecurity frauds that have hit bitcoin owners and exchanges. There is also a lack of cooperation from the government.
CBOE and its rival CME Group Inc have successfully launched cash-settled bitcoin futures contracts, however, which the exchange operators self-certified in December and are regulated by the Commodity Futures Trading Commission. CBOE has asked the SEC to evaluate each cryptocurrency fund and underlying cryptocurrency-related holdings on a case-by-case basis.
More than $70 billion in notional value of bitcoin transactions traded hands in the spot market in December, when the price reached more than $19,000, CBOE said. Such liquidity would easily support bitcoin ETFs or other exchange-traded products (ETPs), the exchange said.
“As the volumes continue to grow, especially on regulated U.S. markets, the overall spot bitcoin market looks more and more like a traditional commodity market and Cboe continues to believe that the spot market is sufficiently liquid to support a bitcoin ETP.”
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