The commission will either approve or disapprove the new proposed pair of bitcoin-based ETFs ProShares Bitcoin ETF and the ProShares Short Bitcoin ETC by the Thursday deadline.
SEC to reach a decision on ProShares Bitcoin ETF on Thursday
Officials at the Security and Exchange Commission of the United States are set to make a final ruling on ProShares Bitcoin ETF, the ProShares Short Bitcoin ETF by Thursday 23rd. earlier this month the commission approved Cboe VanEk, and SolidX bitcoin-based Exchange Traded Fund.
ProShares in conjunction with New York Stock Exchange Arca filed for a rule Change proposal with SEC that if passed would allow ProShares run a Bitcoin ETF. Now SEC has only until Thursday to give their final decision on the ProShares issue.
ProShares ETF proposals were first submitted to the SEC in late 2017. Th are governed by bitcoin futures contracts, rather than any physical holdings of bitcoin itself. According to the original filing, ProShares ETF’s value will be determined by the bitcoin futures contracts trading on CME or the Cboe Futures Exchange.
In September 2017, ProShares proposed its first futures-based ETFs but realized that the futures market was too young at the time. Market condition at the time indicated that there was no assurance that an active trading market for bitcoin futures contracts would develop or be maintained.
Earlier Proposals to SEC
Earlier on, the ProShares Trust requested SEC to withdraw a proposed rule change the company filed on Dec.19, 2017. The withdrawn proposal outlined Proshres Bitcoin & Short Bitcoin ETFs, ProShares Bitcoin Futures/Equity Strategy ETF, and ProShares Bitcoin/ Blockchain Strategy ETF.
The request follows the SEC decision to deny several ETF proposals citing concerns about the volatility of bitcoin. Other companies like Direxion Shares, VanEck and First Trust Advisors also withdrew their related ETF proposals. Shortly afterward, SEC announced that it was considering the futures-based proposals at the end of January 2018.
However, SEC is yet to approve the first bitcoin Exchange Traded Fund proposals. As the regulator is either delaying or denying all filed proposals. Last month, the commission denied another ETF proposal filed by Gemini founders and longtime bitcoin investors Cameron and Tyler Winklevoss. The Winklevoss proposal was first rejected in the spring of 2017. Shortly Bats BZX Exchange, the company that submitted the proposal filed an appeal that was later heard by SEC commissioners.
SEC is not sure of the true implications of Bitcoin Exchange Traded Funds on the existing financial guidelines. This justifies the reason for not approving a single bitcoin ETF to commence business.