After years of trial and error by would-be fund sponsors, cryptocurrency investing is finally opening up to the masses with the first-ever U.S. approval of a bitcoin exchange-traded fund.
The Securities and Exchange Commission (SEC) greenlighted bitcoin futures ETFs in a first for the industry on Friday, after the regulator’s five commissioners met on the issue. ProShares, which filed for its Bitcoin Strategy ETF this past summer, may be the first to launch next week.
The company filed a post-effective amended prospectus on Oct. 15, stating its filing is expected to launch on Monday, Oct. 18.
Proponents of a bitcoin ETF believe the product will be more widely accessible for individuals interested in bitcoin than the actual cryptocurrency is, by giving investors a regulated alternative to the underlying digital asset. The first product will track bitcoin futures, rather than the price of bitcoin directly, however. SEC Chair Gary Gensler indicated he believes futures-based products might provide stronger investor protections due to the laws they operate under.
ETFStore President Nate Geraci told CoinDesk that the form is “a step forward” for digital assets and bridging them with the more traditional financial sector. He confirmed that the filing of a post-effective amendment is confirmation of the SEC’s tacit approval.
“It’s an encouraging sign for the future of crypto to see SEC Chairman Gensler get comfortable in helping mainstream investors more easily access bitcoin exposure,” he said in an email. “The availability of a bitcoin ETF will now bring more investors under the crypto tent and facilitate greater education across the space.”
James Seyffart, an analyst at Bloomberg Intelligence, also confirmed to CoinDesk that the filing is a sign that the fund is launching.
He also anticipates the futures-based ETF launch to act as a bridge to ultimately launching a spot market-based ETF.
Seyffart noted that ProShares’ amended filing removed language about the fund possibly investing in Canadian bitcoin ETFs as a sort of hedge.
“It seems the SEC really did not like that language for whatever reason,” he said. “But they are following standard guidelines and allowing first to file to launch first. So we will be tracking closely how much of a first mover advantage there is here.”
A spokesperson for ProShares referred CoinDesk to the post-effective prospectus.
