SEC letter indicates that the outlook is not rosy for Bitcoin ETF’s
Recently, a couple of Bitcoin-based ETF’s were launched on the New York Stock Exchange. SEC has sent a letter to one of the companies seeking more guidance on the respective fund.
SEC has more than a dozen applications pending for Bitcoin exchange-traded funds. SEC is worried about the volatility in Bitcoin prices as well as cryptocurrencies and wants to protect the investors from such wild swings in prices.
According to the commission, the outlook is not that rosy when it comes ot bitcoin based ETFs.
The letter, however, does not just pertain to these 2 companies but it is at is to the public as well as investors in general. The letter includes the mission statement of the SEC as well as the history of the SEC. SEC has also detailed the jurisdiction which it has over various investment solutions. According to the SEC, there are quite a few issues with the Bitcoin-based ETFs which can impact the ETF investors. As per the letter, the excitement surrounding Bitcoin ETF’s has actually hyped them up significantly. Also, owing to the trading of Bitcoin futures, more and more investors are exposed to crypto currency-based investment solutions.
Also, the letter includes a lot of different questions which need to be answered by the companies which are currently running the Bitcoin-based ETF’s. It remains to be seen whether the commission actually takes any action against such companies or whether these letters are issued in order to just garner more information about the Bitcoin-based ETF’s.
On the part of the investors, the investment in Bitcoin-based ETF’s is increasing significantly. Since there are only a couple of options available, it remains to be seen whether these options as well are curtailed. Currently, SEC is not in favor of letting them trade owing to the fact that it does not entirely provide a safe investment solution for the investors. Most of the investors are just underestimating the risk while investing in Bitcoin ETF’s.
The end of the letter also states a couple of individuals who can be contacted for any future reference pertaining to the trading of ETFs as well as the questions which have been asked in the letter. It remains to be seen whether such ETF’s are allowed to continue or whether they are curtailed owing to the doubts which the SEC has on them. The future of the Bitcoin-based ETFs would always be dependent on how they respond to the questions and inquiries by the SEC.