The United States Securities and Exchange Commission has opened a period of open commentary on the request filed by Van Eck Associates Corp. to operate a Bitcoin exchange-traded fund, which would ostensibly be listed on the Chicago Board Options Exchange instead of Wall Street venues such as the New York Stock Exchange or the Nasdaq. The SEC will wait another 21 days worth of public comments on this issue.
Van Eck Associates' plan for putting together an ETF would be for them to submit the proposal and the SEC has until June 27th to allow and review the proposal. After that time, the SEC and U.S. Treasury will release their position with the ETF proposal.
Bitcoin ETF Would Create Another Virtual Market
The rule change is one of several that will be reviewed over the coming months in an effort to reduce risk. Currently, when securities exchange trading is halted for reasons such as a security crash or the inability to pay debts, exchange companies pay the losses directly to the original buyer. Bitcoin ETF investors and traders need to make their own decisions on whether to keep their money, including whether to invest.
Investors have begun to realize the value of Bitcoin, which many traders are hoping will return to $50,000 within the next few weeks. Since Bitcoin isn't a formal currency or a legal tender in most countries, trading is prohibited on many exchanges.
One of the benefits of Bitcoin is that it makes it possible for financial advisors, including investment managers, to focus on investing strategies in line with clients' unique individual financial needs.
Bitcoin and the Futures Market
Currently, there is no way to trade the U.S. dollar or other securities within Wall Street unless it is done through ETFs. A Bitcoin ETF would offer an opportunity for investors to invest in tokens and other financial instruments using the bitcoin cryptocurrency.
The concept of Bitcoin is also used in the international market, where there are approximately 150 companies operating exchanges, according to FactSet. They include companies such as China Futures, Asia-Pacific Futures & Securities, Asia Futures Securities and others. One Bitcoin exchange, Bitfinex, has a service called Etherium. It is a software-based exchange, which allows users to create orders for instruments such as ETFs.