Bitcoin ETF Futures are Gaining Momentum
Securities and Exchange Commission Chairman Gary Gensler confirmed his support for products linked to bitcoin futures. The statement was made in remarks prepared for the Financial Times at the conference «The Future of Asset Management in North America» On Wednesday.
Allowed and suspended
On the forum Aspen Security Forum in August, Gensler stated that the regulatory body is loyal to the ETF. Which, in turn, plans to hold futures contracts on bitcoins, rather than assets that are going to store the first cryptocurrency. After a while, a number of issuers filed an application with the SEC to launch futures products.
However, applications have been suspended. Gensler referred to the influx of statements, saying: «We have started considering applications in accordance with the Law on Investment Companies in relation to exchange-traded funds (ETFs) seeking to invest in bitcoin futures traded on CME. In combination with other federal securities laws, the Law of the 40s provides significant investor protection for mutual funds and ETFs».
Gensler said he was looking forward to the SEC staff reviewing applications for bitcoin futures ETFs.
What is Bitcoin Futures
To make money on bitcoin futures, you do not need to buy coins. Futures is an investment instrument that bets on the next cryptocurrency price when using it. Bitcoin futures are used to reduce volatility. In other words, bitcoin futures provide protection for investing money at any rate of the coin.
Many exchanges offer similar services. For example, you can purchase perpetual and quarterly contracts on Binance.
Cryptocurrency Investing is Growing
Despite the long wait for bitcoin-based ETFs or bitcoin futures, it was actually a good year for investment instruments related to crypto assets. In 2021, open-ended mutual funds were launched, investing in cryptocurrency futures traded on CME, which laid the foundation for a potential market in this area.
For example, Bitcoin Strategy ProFund (BTCFX) is one of such funds. Since its launch at the end of July, there has been a steady growth, which indicates the interest of investors in any products related to bitcoin in any form.
BTCFX mainly contains bitcoin futures contracts and aims to provide investors with access to BTC through a familiar investment tool with several levels of protection.
BTCFX invests in futures contracts of the "first month", which are the most liquid futures contracts, as well as the closest to the spot price of the underlying asset. The Fund does not store Bitcoins directly.