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NYSE Seeks Regulators Approval To Launch Bitcoin-Futures ETFs

12 January 2018

The New York Stock Exchange has asked the Securities and Exchange Commission for permission to list five bitcoin-related exchange-traded funds (ETFs).

"The target benchmark's value will be calculated as the last sale price published by the CME or the CBOE or any other U.S. exchange that subsequently trades Bitcoin futures contracts on or before 11 a.m. E.T". ETFs offer both tax efficiency as well as lower transaction and management costs.

"Either traders are actually scared to short bitcoin because of its popularity and its volatility or they are waiting on the sidelines". Having touched $20,000 in December, today bitcoin fell below $15,000 again, as fellow cryptocurrency Ripple lost a third of its value. Notably, there are three "bull" and two "bear" structured funds presently under SEC review. The Bull Funds are categorized as 1.25X, 1.5X and 2X, offering 100%, 150% and 200% returns on the given contract.

Direxion's secretary Angela Brickl noted: "On a call with the Staff on January 5, 2018, the Staff expressed concerns regarding the liquidity and valuation of the underlying instruments in which the Fund intends to primarily invest and requested that the Trust withdraw the Amendment until such time as these concerns are resolved". But they could make access to bitcoin easier and, in the case of the Direxion product, mean bigger stakes for investors. Investors may lose in the same multipliers mentioned above, should the price move against the contracts.

Noise around Bitcoin and its competitors raised in 2017 and brought a 1,700 percent annual gain in the Bitcoin price.

The SEC is seeking input on proposed rules changes by the Chicago Board Options Exchange (Cboe) that could allow the exchange to list up to four bitcoin ETFs. According to the exchange, the products would "enhance competition among market participants, to the benefit of investors and the marketplace".

NYSE Seeks Regulators Approval To Launch Bitcoin-Futures ETFs