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The United States Securities and Exchange Commission (SEC) Division of Investment Management (IM) has urged investors interested in investing in mutual funds with exposure to the Bitcoin futures market, to do so with utmost caution. The division has also made it clear that it still needs to thoroughly evaluate whether the bitcoin futures ecosystem is ripe enough to accommodate an exchange-traded fund (ETF), according to a statement on May 11, 2021.<\/strong><\/p>\n The U.S. Securities and Exchange Commission\u2019s Division of Investment Management (IM) staff has reminded investors that bitcoin (BTC) is a highly speculative asset, and as such anyone interested in pumping their money into bitcoin futures-linked mutual funds must do so with utmost caution.<\/span><\/p>\n IM has advised investors to take several factors into consideration before investing in a bitcoin fund, including thorough consideration of the fund\u2019s risk disclosure, the investor\u2019s own risk appetite, and the possibility of a total loss of funds.\u00a0<\/span><\/p>\n IM wrote:<\/span><\/p>\n \u201cInvestors should understand that bitcoin, including gaining exposure through the bitcoin futures market, is a highly speculative investment. As such, investors should consider the volatility of bitcoin and the bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying bitcoin market.\u201d<\/strong><\/p>\n<\/blockquote>\n At a time when institutional investors such as <\/span>Morgan Stanley<\/span>, Citibank, BNY Mellon, and a host of others are making in-roads into the cryptocurrency ecosystem, IM staff has stated categorically that it will thoroughly point its searchlight into mutual funds investing in bitcoin futures, to ascertain whether they operate in compliance with Investment Company Act, as well as existing federal securities laws.\u00a0<\/span><\/p>\n<\/span>IM Warns Bitcoin Futures Investors\u00a0<\/strong><\/span><\/h2>\n
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<\/span>Uncertainties Trail U.S. Bitcoin ETF Launch\u00a0<\/strong><\/span><\/h2>\n
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