At the core of ProShares’ Bitcoin futures ETF lies a “highly speculative asset class” with all the hallmarks of volatility. SEC Chair Gary Gensler said this on CNBC during a discussion of the start of trading.
He confirmed the regulator’s position regarding possible approval of spot ETFs based on the first cryptocurrency. Applications to launch such ETFs have been filed with the regulator since around 2017, but none of the potential issuers convinced the Commission of the spot Bitcoin market’s resilience to manipulation.
In August, Gensler stated that the SEC is prepared to consider ETFs based on regulated Bitcoin futures.
Following this, a wave of applications to launch similar products followed from Valkyrie Investments, VanEck, Invesco, ProShares, Galaxy Digital, AdvisorShares and BlockFi.
On October 15, the SEC quietly approved ProShares’ ETF prospectus. The fund’s shares began trading on the New York Stock Exchange on October 19.
Commenting on the product launch, Gensler noted that the regulator aims to evaluate new projects from an investor-protection perspective, and Bitcoin futures have been under the oversight of the SEC’s subsidiary agency — the Commodity Futures Trading Commission — for several years.
“You have a product that has been regulated by the federal regulator for the past four years, and it is also within the SEC’s jurisdiction under the Investment Company Act of 1940. This gives us a degree of ability to protect investors,” he explained.
On the record, ProShares’ bitcoin ETF (BITO) traded nearly $1 billion on its debut day. By this measure the instrument ranked second among all exchange-traded funds.
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