ProShares is set to launch the first bitcoin exchange-traded fund listed in the United States.
Bethesda of Maryland filed documents Friday afternoon, paving the way for the launch of the Bitcoin Strategic ETF next week. The fund, which is created by ticker BitOs and holds bitcoin futures contracts instead of the cryptocurrency, will begin trading on Tuesday.
The launch follows a 75-day review by the Securities and Exchange Commission. Assuming no regulatory objections, the fund will be considered liquidated for trading next week, giving companies the opportunity the industry has been joking about for years.
BitOce appears to be at the forefront of a broad wave of bitcoin futures-based ETFs. According to analysts, Valkyrie Investments, Invesco and VanEck may be allowed to develop their own funds this month, with Galaxy Digital, AdvisorShares, Bitwise, BlockFi and ARK Investment Management in November and December. to continue.
The fund is a by-product of the asset management company’s effort to launch an eight-year ETF that buys bitcoin itself. The SEC does not support this view, stating that bitcoin transactions are not transparent enough to protect investors from fraud and manipulation.
In August, SEC Chairman Gary Gensler announced that he would prefer ETFs trading bitcoin futures. Unlike digital currencies, futures are traded in regulated venues such as the Chicago Mercantile Exchange...
Todd Rosenbluth, CFRA’s Head of ETFs and Investment Trust Research, said:
As the SEC explained in a tweet on Thursday, bitcoin futures products are still at risk and tied to investor information.
“Be sure to carefully consider the potential risks and benefits before investing in a fund that holds bitcoin futures contracts,” the SEC said.
Futures-based ETFs can be hampered by discrepancies between the futures market and the underlying assets they track, and bitcoin is notorious for its volatility.
This and other factors could hold back bitcoin’s performance if the ETF continues to rise. Long-term bitcoin futures trade above short-term contracts, a market dynamic known as contango. This can reduce the return of money paid for rolling over monthly contracts.
These funds “should give investors similar returns to bitcoin spot prices, but actual returns may differ,” said Cobo West, who recently launched bitcoin futures as a mutual fund. Karan Sood, Chief Executive Officer, said.
ProShares, Invesco, VanEck and a few other asset managers initially offered other bitcoin-related exposure to the cryptocurrency, such as some Canadian ETFs and pooled investment trusts. The property is proposed to be held.
As of Friday’s presentation, ProShares has revised its strategy to hold only bitcoin futures contracts. Analysts said the SEC is likely to be concerned about holding other assets, given the issues raised earlier by regulators. Analysts said the change suggests other firms may limit their funds to trading only bitcoin futures.
write in [email protected] Michael Wursthorn
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