Cboe Global Markets, the foremost to ever launch Bitcoin futures, would like the Securities and Exchange Commission to permit cryptocurrency exchange-traded funds.
“Cboe encourages the Commission to approach Cryptocurrency ETPs [exchange-traded products] holistically and from the same perspective that it has historically approached commodity-related ETPs”, the derivatives trade explained Friday in a letter into the SEC, released online Monday.
“The Commission should not stand in the way of such ETPs coming to market” given Cboe’s arguments for addressing the SEC’s concerns, the letter stated.
The SEC did not immediately respond to a CNBC petition Tuesday to get a comment on this correspondence. Separately, the commission said Friday it could begin the process of determining whether it is going to allow NYSE Arca to list two ProShares funds tracking bitcoin futures.
Back in January, Dalia Blass, manager of the SEC’s division of investment management, pushed back from numerous applications for bitcoin-related ETFs. In a letter to two U.S. trade classes, Blass said the goods have yet to address issues such as extreme price volatility at cryptocurrencies along with liquidity in related funds.
Friday’s correspondence from Cboe President and COO Chris Concannon was written to Blass in reply to her writings.
“While Cboe shares a lot of the concerns raised in the Staff Letter, we feel that the huge majority of these concerns could be addressed within the existing frame for commodity-related funds associated with valuation, liquidity, custody, arbitrage, and manipulation,” Concannon said.
He explained Cboe expects trading volumes from bitcoin futures markets to soon reach levels “similar to those of other commodity futures in the time that they were contained in ETPs.” Concannon added that “Cboe has undertaken significant steps to discover and protect against manipulation in the bitcoin futures market.”
Cboe became the first important exchange to launch bitcoin futures Dec. 10 and implemented after that month using the SEC to record six bitcoin-related exchange-traded funds. CME, the world’s largest futures exchange, started bitcoin futures one week following Cboe, spurring hopes that the more institutional investors would buy in the trend of soaring interest in cryptocurrencies.
Nevertheless, trading volumes in the two bitcoin futures remain relatively light. Futures commission merchants also have limited client access to these products, while bitcoin itself has lost more than half of its value as the December release of their futures contracts.
