Key takeaways
- The SEC shared an investor education bulletin for investing in Bitcoin Futures ETFs.
- The educational material is being considered as a confirmation that a Bitcoin futures ETF approval may soon be in sight.
- A Bloomberg report also notes that key sources have said the SEC will no longer oppose Bitcoin futures ETFs.
The crypto market has been anticipating a cryptocurrency exchange-traded fund approval by the Securities and Exchange Commission for a while now. Prior to October, it was predicted by several analysts that this would be the month those expectations would be met.
At present, the sentiments that fueled the high expectations are getting even stronger as the SEC has highlighted a guideline for safely investing in funds trading in Bitcoin futures. In a tweet yesterday, the investor education arm of the SEC shared a link to an investor bulletin that was first published in June, two days before the launch of the first U.S.-listed Bitcoin futures mutual fund from ProFunds/ProShares.
The bulletin, which is authored by a joint effort of the SEC’s Office of Investor Education and Advocacy (OIEA) and the CFTC’s Office of Customer Education and Outreach (OCEO) urged investors to “weigh carefully the potential risks and benefits” of investing in “a fund with exposure to the Bitcoin futures market.” It adds that investors should be aware that gaining exposure to Bitcoin is still a highly speculative investment, was still not in the clear from regulators, and was still prone to fraud and market manipulation.
However, the bulletin locked in on the potential of a futures ETF to offer some form of protection for investors as the laws under which it is established – the Investment Company Act of 1940 – requires that the funds comply with strict valuation, custody, and liquidity laws. It then goes on to advise intending investors to consider their personal risk tolerance, the fund’s disclosure of its risks, and the ever-present risk of losing all of one’s investment before reaching a decision to buy into a Bitcoin futures ETF.
Significantly, the market is not considering the investor education material to be a mere coincidence. For a lot of market observers including Bloomberg Intelligence’s James Sayffart, it is a confirmation of the facts that he has put forth in his argument for a cryptocurrency ETF by the SEC this month. According to a Bloomberg report written by Katie Griefeld today, several key sources familiar with the ETF situation have disclosed that the government body will no longer oppose Bitcoin futures ETFs. For Sayffart, who has already upped the odds he placed on the likelihood of several Bitcoin ETFs, the report is confirmation that approval is incoming as soon as next week.
Currently, the closest thing to a cryptocurrency ETF in the U.S. is the “Volt Crypto Industry Revolution and Tech ETF” which was approved this month as well. The ETF offers indirect exposure to Bitcoin through companies with exposure to the cryptocurrency and its supporting infrastructure.
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