SEC Must Approve or Reject ProShares Bitcoin ETF as Thursday Deadline Looms
The U.S Securities and Exchanges Commission faces a deadline to either approve or disapprove two Bitcoin ETF proposals Thursday August 23, 2018.
The U.S Securities and Exchanges Commission faces a deadline to either approve or disapprove two Bitcoin ETF proposals Thursday, August 23, 2018.
The latest decision from the SEC comes hot on the heels of the government regulator voting to delay a decision on another highly anticipated exchange-traded fund (ETF).
Officials at the agency must come to a decision on the ProShares set of ETFs by Thursday, August 23 (tomorrow). The pair of Bitcoin ETFs the agency needs to give a decision on is ProShares Bitcoin ETF and ProShares Short Bitcoin ETF.
Unlike with some of the earlier decisions, the securities agency does not have the luxury of postponing this decision anymore. The reason is that the regulator must adhere to its own rules that give specific timelines.
In early July, the commission rejected a bitcoin exchange-traded fund proposal by Gemini owners Tyler and Cameron Winklevoss. And earlier this month, commissioners at the agency voted to postpone a decision on whether to approve or reject Cboe’s VanEck/SolidX bitcoin ETF.
At the time, the regulator had noted:
“The Commission designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”
The ProShares ETF proposals
ProShares made their initial application to the SEC in December 2017. Their proposal constituted of an ETF backed by bitcoin futures contracts, as opposed to one backed by physical bitcoins.
The company’s original application also showed that ProShares’ ETFs will draw their value from the bitcoin futures contracts. If approved, these instruments will trade on the CME or the CBOE.
According to the ProShares filing before the SEC, the company made the original proposal for Futures-based exchange-traded funds in September 2017.
However, the company pointed out that the futures market was still in infancy. It noted that there were no assurances of there ever going to be a market for Bitcoin Futures Contracts.
Documents show that the ProShares Trust requested the Securities Commission to consider withdrawing its earlier application on December 19 last year.
That decision was informed by the commission’s poor reception of a series of such proposals due to what it termed as Bitcoin’s high volatility and risk of manipulation.
Its September application had originally constituted the ProShares Bitcoin and Short Bitcoin ETFs. It also had the ProShares Bitcoin Futures/Equity Strategy ETF as well as the ProShares Bitcoin/Blockchain Strategy ETF.
However, things became a lot clearer in January 2018 when the SEC announced that it would consider bitcoin ETFs backed by futures contracts.
Thursday’s deadline comes on the back of a mostly unfavorable return from the SEC on similar proposals. The crypto community is likely to be less expectant, with some like Andreas Antonopoulos saying that a Bitcoin ETF would be a terrible idea.
Bitcoin is currently trading in a tight range above key support at $6,400, having failed to move above $6,600 over the weekend. The bears have tried to push down, but the bulls are holding firm.
News such as that from the SEC could see BTC prices make a decisive move on either side of the charts.
UPDATE: August 23, 2018
The SEC rejected the ProShares Bitcoin ETF application together with a few others.