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The New York Stock Exchange (NYSE) has filed with the Securities and Exchange Commission (SEC) to list two exchange traded funds (ETFs) that would track Bitcoin futures.
The funds, offered by ETF provider ProShares, are called the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF. Neither fund would purchase Bitcoin, instead they would invest in futures contracts, with the former benefiting when the value of those contracts rises, and the latter when the value falls.
Cryptocurrency ETFs would be a big step toward bringing Bitcoin into mainstream investing. The funds’ custodian would be Brown Brothers Harriman, whose head of emerging markets strategy, Win Thin, said he believes the ETFs indicate the mainstreaming of cryptocurrencies. That’s likely because ETFs have wide accessibility due to the fact they typically have higher liquidity, and lower fees, than many other investment vehicles. Additionally, as regulated instruments, the new ETFs would result in more regulatory oversight for the cryptocurrency investment space, Thin says. That could draw in more cautious investors.
But NYSE still needs the SEC’s approval. The exchange is by no means the first to file a cryptocurrency ETF with the SEC, but none have yet been approved by the regulator. The SEC’s reasons for rejecting past applications largely centered on poor regulation of cryptocurrency markets, and the potential that raised for market manipulation. NYSE will likely be hoping that the regulatory approval given to the futures on which its ETFs are based will calm those fears, and enable it to become the first exchange to offer the instruments.
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The Bitcoin 101 Report by the BI Intelligence Research Team.
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