Bitcoin Futures ETF Set for Milestone with US Debut

The Securities and Exchange Commission (SEC) is preparing to allow the first exchange-traded fund (ETF) of Bitcoin futures from USA, which would mark a watershed moment for the cryptocurrencies, according to people familiar with the matter.

The regulator likely won’t stop the products from starting trading next week, said the people, who asked not to be named commenting on the decision. Unlike ETF applications of bitcóin previously rejected by the regulator, the ProShares and Invesco Ltd. proposals are based on futures contracts and were submitted under mutual fund rules that SEC Chairman Gary Gensler has said provide “important protections for investors ”.

A spokesperson for the SEC declined to comment, as did a representative for ProShares.

Bitcoin nearly touched $ 60,000, the highest level since April, while cryptocurrency-linked equity futures rose in pre-market opening trading. The largest cryptocurrency by market value has rebounded nearly 90% in three months and is approaching the record of $ 64,869 set earlier this year.

Barring a last-minute setback, the fund’s launch will be the culmination of a nearly decade-long campaign by the $ 6.7 trillion ETF industry. Advocates have sought approval as confirmation of the widespread acceptance of cryptocurrencies since Cameron and Tyler Winklevoss, the twins best known for their involvement in the history of Facebook Inc., first filed for a bitcoin ETF in 2013.

For years, approval has been out of reach for issuers who, amid countless false signs of progress and outright rejections, have tried to get a variety of different structures authorized for negotiation. Over the years, there have been plans for funds that proposed to hold bitcoin through a digital vault or that could use leverage to make a profit. Others were trying to mitigate bitcoin’s notorious volatility, a key point of controversy for the SEC.

In the past, the SEC has argued that the cryptocurrency space is fraught with dangers for investors. The SEC had expressed concern that prices were manipulated and liquidity was insufficient, and that the drastic swings in bitcoin prices could be excessive for private investors. The last three Bitcoin returns in a year were a loss of 74% followed by gains of 95% and 305%. In addition, the SEC has questioned whether the funds have the information necessary to properly value cryptocurrencies or related products. The validation of the ownership of the coins in the hands of the funds and the threat of hackers have also been questioned.

Many crypto advocates were encouraged when Gensler took over the agency, due to his previous interest in the crypto world, having once taught a class at MIT’s Sloan School of Management called “Blockchain and Money.” But the president has also referred to the space in recent months as the “Wild West” and has signaled that he wants stronger oversight of the markets.

Sentiment seemed to change in August, when Gensler signaled that he would favor funds based on CME-traded bitcoin futures introduced under a 1940s law. He reiterated his stance late last month.

This has sparked a wave of futures-backed applications and unbridled optimism among issuers that approval could be imminent. Speculation has fueled a dizzying rally in the price of bitcoin, which has nearly doubled in value since falling below $ 30,000 in late July.

Four futures-backed bitcoin ETFs could start trading on U.S. exchanges this month, and deadlines for VanEck and Valkyrie applications are also approaching. Meanwhile, dozens of publicly traded cryptocurrency products have been launched in Canada and across Europe. Valkyrie declined to comment.