After Successful Launch of Bitcoin Futures, CBOE Files for Six Bitcoin ETFs

24. Dec 2017 Posted by Akolkar B on News

The Chicago Board Options Exchange (CBOE) had a successful launch of Bitcoin futures contracts earlier this month on Dec. 10. Now, the U.S.-based exchange is planning to enter into one more investment product which is the much-awaited Bitcoin-based Exchange Traded Funds (ETFs). After NYSE filing for two Bitcoin ETFs earlier this week, CBOE too has applied for six Bitcoin ETFs with the U.S Securities and Exchange Commission (SEC).

According to the public records available on the CBOE website, the proposed rule changes were filed with the SEC between Dec. 15 and Dec. 19. The six funds filed by CBOE with the SEC include:

  • First Trust Bitcoin Strategy ETF
  • First Trust Inverse Bitcoin Strategy ETF
  • REX Bitcoin Strategy ETF
  • REX Short Bitcoin Strategy ETF
  • GraniteShares Bitcoin ETF
  • GraniteShares Short Bitcoin ETF

According to the First Trust filing, the fund "intends to invest primarily in Bitcoin Futures Contracts, [though] it may also invest in other Listed Bitcoin Derivatives, OTC Bitcoin Derivatives, U.S. exchange-listed ETPs, and Non-U.S. Component Stocks (collectively, 'Bitcoin Instruments')."

While talking to CNBC, a CBOE spokesperson said: "Given the success of the launch of our bitcoin futures, several partners are very interested in moving forward with the development of an exchange-traded product.”

CBOE’s exchange-traded-funds will allow investors and traders to bet on the momentum and the volatility in the Bitcoin futures contracts. Note that the ETF will not be tracking the price of Bitcoin in any case neither will it hold the digital asset. Moreover, CBOE CEO, Ed Telly has earlier told the press that once the Bitcoin futures are underway, the firm can think of moving ahead with ETF.

While talking to Reuters, Telly said: “Once liquidity builds in the CBOE bitcoin futures contract and the exchanges are able to show how their oversight of the underlying market works, CBOE plans to reapply with the U.S. Securities and Exchange Commission to launch a bitcoin ETF.”

There have been considerable attempts in the past to bring Bitcoin ETFs to the market. However, the applications were left not-reviewed or neglected by the SEC. But now that Bitcoin futures are already live in markets, the probability of considering the option for Bitcoin ETF has increased considerably.

Making some early and quick moves in the market, CBOE has hinted the exchange is here to stay and can possibly bring more cryptocurrency products as and when the need arises. Moreover, with more companies arriving with their Bitcoin investment products, they are expected to bring more legitimacy and reduce volatility in the Bitcoin prices.