CBOE Urges SEC To Allow Growth Of Bitcoin ETFs

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CBOE Urges SEC To Allow Growth Of Bitcoin ETFs

CBOE Global Markets, an exchange operator has suggested to the US Securities and Exchange Commission (SEC) to allow the growth and development of Bitcoin Exchange-Traded-Fund (ETF since they were recently considered to be the same as other commodity-based ETFs. However, SEC didn’t respond immediately to the matter but later announced that it will put into consideration whether the ETPs can be listed on NYSE Arca.

The company expressed their concerns by writing to the SEC in response to the letter published in January by the Director of SEC’s investment management division, Dalia Blass that halted the applications of Bitcoin ETFs in the country. The main reason was that the crypto-assets have high price volatility and liquidity in similar funds. Generally, ETFs have a high daily liquidity but with lower charged fees compared to the shares of the mutual funds.

The company believes that the most of the concerns raised by SEC can be resolved within the current cryptocurrency framework and that the trading volumes in the Bitcoin Futures have the potential to continue increasing sustainably.

According to Chris Concannon president of CBOE, SEC should put into consideration the fact that the cryptocurrency volumes are drastically growing and with regulated US markets, the cryptocurrency markets will soon look like the traditional commodity market. Therefore, the potential market is satisfactorily liquid to sustain a Bitcoin ETP.

CBOE is the first company to launch Bitcoin futures in December 2017 and applied to the Commission to list on its platform six Bitcoin-related exchznge-traded funds. After a span of one week, CME also launched its Bitcoin futures with high expectations that other institutional investors will embrace the idea behind the crypto-assets.

Unfortunately, the trading volume in the two Bitcoin futures companies remain fairly minimal due to the limited access to the digital assets and the diminishing value of Bitcoin since December last year. This could be one of the reasons why CBOE is urging the Commission to approach the cryptocurrency ETPs the same way it handles the commodity-based ETPs.

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