Rumors are flying. The SEC could approve a Bitcoin Futures ETF before the year ends. It seems like the US Security And Exchange Commission will not give the go-ahead to the mythical Bitcoin ETF just yet\u2026 or ever, but a new option has a few companies salivating. What does this mean? And why a Bitcoin Futures ETF before one for the asset itself? That\u2019s what we\u2019re here to explore. <\/span><\/p>\n

But first, why is the SEC hesitant about approving the Bitcoin ETF? <\/span>Investopedia<\/span><\/a> responds:<\/span><\/p>\n

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\u201cThe reason is that bitcoin, the largest cryptocurrency in the world by market capitalization, remains largely unregulated. Additionally, the Securities and Exchange Commission (SEC) is hesitant to allow an ETF focused on the new and largely untested cryptocurrency market to make its way to the public.\u201d<\/span><\/p>\n<\/blockquote>\n
If that\u2019s true, what makes us think that a Bitcoin Futures ETF is not only possible, but imminent? Well, last month The SEC Chairman <\/span>Gary Gensler told the Aspen Security Forum<\/span><\/a>:<\/span><\/p>\n
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\u201cI anticipate that there will be filings with regard to exchange-traded funds (ETFs) under the Investment Company Act (\u201940 Act). When combined with the other federal securities laws, the \u201940 Act provides significant investor protections.<\/span><\/p>\n
Given these important protections, I look forward to the staff\u2019s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures.\u201d<\/span><\/p>\n<\/blockquote>\n
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\ud83e\udd2f pic.twitter.com\/XUlSV31jEw<\/a><\/p>\n
\u2014 Eduardo Prospero (@edprospero23) September 23, 2021<\/a><\/p>\n<\/blockquote>\n
Is A Bitcoin Futures ETF What US Investors Want?<\/span><\/h2>\n
Since Gary Gensler sent such a clear signal, the <\/span>financial world responded<\/span><\/a> in unison.\u00a0<\/span><\/p>\n
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\u201cAt least four asset managers have filed for ETFs that invest in bitcoin futures after Securities and Exchange Commission chair Gary Gensler earlier this month indicated that he could approve such funds. But investors may not want them in lieu of physically backed bitcoin ETFs, analysts have said.\u201d<\/span><\/p>\n<\/blockquote>\n
According to Investopedia, \u201c<\/span>A bitcoin ETF mimics the price of the digital currency, allowing investors to buy into the ETF without trading bitcoin itself.<\/span><\/i>\u201d However, who\u2019s interested in ETFs when bitcoin, the asset, is widely available? Some investors or groups simply can\u2019t invest in bitcoin because their own internal rules won\u2019t allow them to. They can\u2019t purchase bitcoin through a brokerage account. No financial institution backs it, so no one protects them. And, of course, there\u2019s the feared volatility.<\/span><\/p>\n
Bloomberg<\/span><\/a> explains how Bitcoin fixes this:<\/span><\/p>\n
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\u201cA Bitcoin ETF could help get around those restrictions since the format is more widely accepted. \u201cThere are all sorts of custody and regulatory hurdles for big financial institutions to jump through,\u201d said Ross Mayfield, investment strategy analyst at Robert W. Baird & Co. \u201cIf it were offered in an ETF, it clears a lot of that up for financial institutions.\u201d<\/span><\/p>\n<\/blockquote>\n
However, it appears that the SEC won\u2019t approve one any time soon. Why would they approve a Bitcoin Futures ETF instead? Bloomberg continues:<\/span><\/p>\n
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\u201cFor the SEC\u2019s purposes, Bitcoin futures also offer an additional level of security because they are governed by the Chicago Mercantile Exchange and require investors to put down cash on margin to trade, as a form of collateral.\u201d<\/span><\/p>\n<\/blockquote>\n
$\"BTCUSD$ <\/p>\n