Following the December 2017 listing of futures contracts based on Bitcoin by two exchanges regulated by the Commodity Futures Trading Commission (CFTC), several fund sponsors and securities exchanges applied to the Securities and Exchange Commission (SEC) to list exchange-traded funds (ETFs) that would invest in those futures contracts.
By investing in futures contracts regulated by the CFTC, instead of Bitcoin itself, these ETFs seemed designed to address concerns that had previously led the SEC to deny applications to list ETFs linked to Bitcoin. This change was not sufficient, however, as the SEC raised new concerns in early January that led to the withdrawal of these new applications. Exchanges, ETF sponsors and investors are now left wondering: what will it take for an ETF linked to Bitcoin to pass muster with the SEC?
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