Proponents of a bitcoin ETF believe the product will be more widely accessible for individuals interested in bitcoin than the actual cryptocurrency by giving investors a regulated alternative to the underlying digital asset. The first product will track bitcoin futures, rather than the price of bitcoin directly, however. SEC Chair Gary Gensler indicated he believes futures-based products might provide stronger investor protections due to the laws under which they operate.
The SEC has, in the past, explicitly rejected bitcoin ETF applications, but it does not need to formally approve one. Under federal law, the SEC can just allow an application to become effective, rather than make a formal announcement.
ETFStore President Nate Geraci told CoinDesk the form is “a step forward” for digital assets and bridging them with the more traditional financial sector. He confirmed that the filing of a post-effective amendment is confirmation of the SEC’s tacit approval.
“It’s an encouraging sign for the future of crypto to see SEC Chairman Gensler get comfortable in helping mainstream investors more easily access bitcoin exposure,” he said in an email. “The availability of a bitcoin ETF will now bring more investors under the crypto tent and facilitate greater education across the space.”
James Seyffart, an analyst at Bloomberg Intelligence, also confirmed to CoinDesk the filing is a sign the fund is launching.
He also anticipates the futures-based ETF launch to act as a bridge to ultimately launching a spot market-based ETF.
Seyffart noted that ProShares’ amended filing removed language about the fund possibly investing in Canadian bitcoin ETFs as a sort of hedge.
“It seems the SEC really did not like that language for whatever reason,” he said. “But they are following standard guidelines and allowing first to file to launch first. So we will be tracking closely how much of a first mover advantage there is here.”
A spokesperson for ProShares referred CoinDesk to the post-effective prospectus.
Long time coming
Industry participants have long sought to launch a bitcoin ETF, with Gemini founders Tyler and Cameron Winklevoss first seeking an ETF in 2013. The SEC has rejected every previous application to date, and still has yet to weigh in on more than 30 other current applications.
It is likely the SEC will only allow futures ETFs to launch this year, however. Gensler’s comments supporting a futures ETF hint that he will not allow a spot market ETF to launch in the near term.
“I highly doubt the SEC will approve the product this year,” Seyffart said.