The US Securities and Exchange Commission has clearly demonstrated its critical attitude towards cryptocurrencies in recent months with the ripple process and the blocking of Bitcoin spot ETFs. But despite its generally skeptical attitude, the authority could now open ETFs that map Ethereum.
• SEC blocks bitcoin spot ETFs
• Criticism of crypto market
• Is the Ethereum ETF coming?
No bitcoin spot ETF in sight yet
In addition to ARK Invest boss Cathie Wood, seven other asset managers are currently applying for a Bitcoin spot ETF with the US Securities and Exchange Commission (SEC). However, these have not yet been approved, which is certainly also related to the authority’s critical attitude towards cryptocurrencies, as the legal dispute with Ripple has shown in recent years. Nevertheless, the star investor recently expressed confidence to the news agency “Bloomberg” that the spot ETFs for Bitcoin will be released soon.
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However, Bitcoin futures ETFs already abound. The first of its kind was the ProShares Bitcoin Strategy ETF (BITO), which launched in October 2021. Because while a spot ETF would hold Bitcoin as an underlying and represent actual units of the largest cryptocurrency weighted by market capitalization, a futures ETF invests in futures on Bitcoin. This means that the ETF has underlying contracts, which are agreements to buy or sell at a predetermined price on a specific date in the future. Investors can thus speculate on future price movements – in both directions – without having to hold tokens themselves.
Ethereum ETFs on the rise?
And even if the applications for Bitcoin spot ETFs are still maturing at the US Securities and Exchange Commission, an opening seems to be in the offing for Bitcoin’s little brother. According to reports from Bloomberg, the SEC has expressed its willingness to allow futures-based futures-based Ethereum exchange-traded funds after a history of turning down applications. People familiar with the matter are said to have told the news agency that the authority no longer wants to block possible Ethereum futures ETFs.
Decision expected by October
According to Bloomberg, nearly a dozen companies, including Volatility Shares, Bitwise, Roundhill and ProShares, have already applied for approval of such a financial product. However, it is not yet clear which of the submitted applications the SEC intends to approve. However, sources familiar to the agency said the decisions should be made by October.
SEC warns of risks
In the past, the stock exchange supervisory authority, led by Gary Gensler, has increasingly argued against crypto ETFs, since the market for Bitcoin, Ether & Co. is associated with great risks for investors. According to Bloomberg, the officials warned against manipulated prices and a lack of liquidity in such funds. In addition, cryptocurrencies, especially Bitcoin, are affected by strong price fluctuations, which poses a high risk potential for investors.
It remains to be seen whether Gensler and the rest of the authority will actually open up more to trading in cryptocurrencies.
Editorial office finanzen.net