After refusing, delaying or ignoring dozens of applications in the past four years, the US Securities and Exchange Commission has now approved the first Bitcoin (BTC) ETF.
ProShares may start trading on Monday
ProShares released an amended prospectus on Friday submitted. This indicates that it has been given the go-ahead for its Bitcoin Strategy ETF to launch on Monday. The company’s ETF is tied to Bitcoin futures contracts rather than directly to Bitcoin’s current price. Yet its adoption is still a milestone for the crypto industry.
ETFs are investment products that track the price of stocks, commodities or other assets. They are also traded on public exchanges just like stocks. That means they can be bought and sold during regular market hours and easily incorporated into retirement and savings plans for people who would otherwise avoid the hurdles of buying crypto on an exchange like Coinbase.
‘Pure’ Bitcoin ETF yet to be approved
A “pure” Bitcoin ETF would closely monitor the actual price of BTC. Such an ETF has yet to be approved by the SEC. Companies hoping for such an ETF began moving to futures-backed ETF proposals. This was in response to SEC chairman Gary Gensler suggesting they would have an easier road to approval.
A growing number of companies are awaiting approval for their own ETFs, including Mike Novogratz’s Galaxy Digital and Cathie Wood’s ARK Invest. By the end of October, two other Bitcoin futures ETFs could be in the market. The SEC is faced with deadlines to approve proposals from VanEck and Valkyrie.
On Thursday, the agency shared its intentions. One of his social media accounts tweeted an investor bulletin about Bitcoin futures trading in a Tweet. It wrote:
“Be sure to carefully weigh the potential risks and rewards before investing in a fund that has Bitcoin futures contracts.”
Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.
Check out our Investor Bulletin to learn more: https://t.co/AZbrkpfn8F
— SEC Investor Ed (@SEC_Investor_Ed) October 14, 2021
Right now, Bitcoin holders are ready for the benefits – and to open the floodgates.