Bitcoin Futures Success Results in Increasing SEC License Applications

Several prospective Bitcoin exchange-traded fund (ETF) providers have rushed to seek regulatory approvals from the US Securities and Exchange Commission (SEC) following the successful launching of Bitcoin futures contracts in mid-December.

The agency has previously rejected similar applications in the past, but it is expected that it will reverse its position this time due to the introduction of Bitcoin futures products.

Two days following the launching by the Chicago Board Options Exchange (CBOE) of its Bitcoin futures products, three fund managers, namely, Van Eck Associates Corp., First Trust Advisors LP, and ReX Shares LLC have applied for Bitcoin ETF licenses with the SEC.

In its report, the Financial Times explained that the launching by the CBOE and the CME Group of their Bitcoin derivatives products has inspired the ETF providers to seek regulatory approval for Bitcoin ETFs.

“The launch of Bitcoin derivatives by two big exchanges has encouraged potential ETF providers to push for approval of funds that would track Bitcoin futures instead of the underlying cryptocurrency.”

In his comment on the developments, Morningstar head of ETF research, Ben Johnson, claimed that the launching of the Bitcoin futures covers most of the agency’s worries.

“The futures cover most of the SEC’s concerns by creating a cleared, regulated financial instrument.”

With the successful launching of Bitcoin futures contracts and the expected SEC approval of Bitcoin ETFs, various financial experts project that Bitcoin’s value and trading volumes will reach new record highs in the next few days.

According to Altegris chief investment officer Matt Osborne, the volume of Bitcoin trading will gradually increase as professional traders will get comfortable with the price movements, volatility, and margin usage.

“Volumes are going to slowly increase as professional traders get comfortable with the price action and more importantly get comfortable with the volatility and the margin usage.”

Such surge in demand for Bitcoin and Bitcoin Futures will certainly increase not only the interest for Bitcoin, but also more license applications.