The financial world offers a plethora of derivatives that can be issued upon an asset. Bitcoin [BTC] derivatives that made most of the news this year was the Futures contract. Along with the introduction of the much-awaited launch of Bakkt, the trading volume of regulated Bitcoin futures is more significant than $200 million.
Moreover, Van Eck and SolidX launched another financial instrument of investment in a trust fund. The firm marketed the product as a ‘Limited ETF’ – only available to institutional investors. The SEC still hasn’t approved on the ETF front. This remains to be a critical issue that will enable the inclusion of Bitcoin in investment portfolios.
ETF Deadline This Week
The deadline for the decision on the Bitwise Bitcoin ETF is 13th October, this Sunday. The government agency can make the announcement anytime this week. According to the SEC laws, a delay is not possible this time around – it’s either going to be a yes or no. Matt Hougan from Bitwise Investments told the media,
“We’re closer than we’ve ever been before to getting a bitcoin ETF approved,”
The SEC had raised an abundance of concerns which fell under price discovery and market manipulation, and its high volatility. The price discovery of Bitcoin has significantly improved in the last 18 months with the improvements in Bitcoin custody and futures market. The volatility has also developed over the years. Hence, it will be interesting to see how the SEC views the market for retail investors now.
Moreover, the World Federation of Exchanges, which includes CME, Nasdaq, and even NYSE, has further requested the FCA to reconsider its proposal for an outright ban of derivative for retail customers. Moreover, the federation has laid out recommendations for the exchanges for investor protection in general.
Hence, the progress made during spring and summer this year has primed the crypto markets for an official entry into the financial world. The question remains as to how the regulators view pension, insurance, and other wealth fund managers investing their money in Bitcoin.
Furthermore, in case of rejection, which is likely, the market expects to hear from the SEC on remaining concerns. Hougan noted that in such a case,
“They’ll provide detailed guidance, at least we expect them to provide detailed guidance on which questions they think have been successfully answered, which questions if any remain. So we’ll know how close we’re to the goal line if we’re all the way in or still a few yards outside.”
Do you think the market is primed for an ETF approval? Please share your views with us.