NYSE Arca hopes to list bitcoin futures ETFs

Published on Dec 25, 2017 18:46 By Danish Yasin

The New York Stock Exchange (NYSE) is preparing to move into the virtual token space. The exchange is seeking approval from the SEC to list bitcoin ETFs on its NYSE Arca market. A public document, dated December 19th, details that the exchange has appealed for a rule change in order to launch two bitcoin-tied funds.

The ICE-backed exchange submitted the proposed rule change on December 4th. ProShares Bitcoin ETF and Proshares Short ETF are the names of the two ETFs. ProShares Capital Management first introduced these two funds back in September.

Like other emerging ETFs, these two would also not have direct stakes in bitcoin. Instead, they aim to offer a safer exposure to the digital token industry through derivatives contracts. Costing $25 USD per share, the funds hope to reach a maximum offering of $1 million.

The filing further details that the written ETFs would be tracking two futures contracts. CBOE Global Markets exchange and CME Group Inc.’s Chicago Mercantile Exchange were behind their release.

Until now, the Securities and Exchange Commission (SEC) has received three requests for bitcoin-tied securities. Requests for the Winklevoss Bitcoin Trust ETF and the SolidX Bitcoin ETF were both rejected back in March. The application of the third fund, Grayscale Bitcoin Investment Trust, is being reconsidered by the SEC after an appeal from the Bats BZX exchange.

All three applications were rejected on same grounds. Bitcoin, despite its impressive progress and immense popularity, still holds controversy due to its lack of regulation. There is no government nor central bank that backs the virtual currency. Its value is especially notorious for being prone to volatility and unexpected fluctuations of massive rates.

Moreover, the coin’s market is also prone to hacks and scams. Investors who have recently backed bitcoin lack sufficient awareness regarding the operations of the currency. Surveys have revealed a rise in fraudulent activities in the cryptocurrency industry.

The SEC clearly stated that the proposed products were inconsistent with the commission’s requirements. Funds should be regulated. Markets should have agreements with the funds. These were the requirements of the commission. It is obvious that the market for bitcoin-tied derivatives is still in very early stages. Considering SEC’s strict stance on cryptocurrency trading, it seems unlikely that ProShares’ bitcoin futures-based products will win the commission’s approval.