SEC to Reject Another BTC ETF Applications

Securities and Exchange Commission blocked another Bitcoin ETF, this time - from ProShares
23 August 2018   1502

The US Securities and Exchange Commission (SEC) rejected the application of ProShares Bitcoin ETF and ProShares Short Bitcoin ETF - bitcoin-oriented exchange-traded funds.

At the same time, a similar fate awaited several applications for the launch of bitcoin-ETF, filed by Direxion and GraniteShares.

The application for the launch of ProShares Bitcoin ETF and ProShares Short Bitcoin ETF was jointly with made NYSE Arca, but the SEC believes that the proposed changes of the rules of the exchange can not be accepted.

As noted in the Commission's official response, the exchange was not able to demonstrate that its offer meets the requirements of Section 6 (b) (5) of the Exchange Act, in particular with regard to the requirements for preventing manipulation on the market.

Separately, the SEC drew attention to the fact that its decision does not depend on an assessment of whether bitcoin has value as an innovation or an investment.

Almost the same arguments were brought by the Commission, justifying its decision to refuse the launch of five bitcoins-ETF, the applications for the launch of which were previously filed by Direxion, and two GraniteShares funds. The applications describe tools that are directly tied to the rate of bitcoin and other crypto-currencies.

The first application for the launch of exchange funds ProShares filed in September 2017, but later it was withdrew. The new application was filed in December of the same year, and in the spring of this year it became known that the SEC began its consideration.

According to the widely held opinion, bitcoin-ETF will significantly revive the market due to the inflow of institutional money, but recently Bitcoin-evangelist Andreas Antonopoulos expressed the opinion that such funds can provoke a wave of manipulation in the cryptocurrency market.

BTC Futures Didn't Collapse Market in 2017, - CME

According to the managing director of CME Group, they "didn’t have that wherewithal, that ability to drive that impact"
14 November 2019   131

Tim McCourt, managing director of CME Group, has denied the widespread theory that the alleged launch of regulated bitcoin futures caused a market crash after the 2017 rally.

A lot of times, people ask us, ‘Did futures cause the price to decline from $20,000 to $3,000?’ And the answer is ‘no,’.
 

Tim McCourt

Global head of equity index and alternative investment products, CME Group

He recalled that at first the turnover of bitcoin futures on CME was 1,100 contracts, which is equivalent to 5300-5500 BTC or about $ 100 million at prices at the end of 2017.

There is no way over that period of time, given the size of the Bitcoin market, in terms of spot trading or the ability to mine Bitcoin, that futures could cause that impact. These things are governed by the law of supply and demand. We just didn’t have that wherewithal, that ability to drive that impact.
 

Tim McCourt

Global head of equity index and alternative investment products, CME Group

Chicago Mercantile Exchange (CME) Bitcoin Futures was launched on December 18, 2017. A day earlier, the price of bitcoin reached a historic high in the region of $ 20,000, but soon plummeted.

Despite the sharp change of mood and the bear market, the volume of bitcoin futures trading on CME grew - by May of this year, the average daily turnover reached 13,600 contracts, corresponding to 68,000 BTC or $ 515 million at the exchange rate at that time.

We certainly play a role in the price discovery because people can freely express their demand to buy and sell at CME and transact with one another, but I wouldn’t necessarily say we are impacting price.
 

Tim McCourt

Global head of equity index and alternative investment products, CME Group

Among other things, a CME representative said that he is an ardent supporter of Bitcoin ETF and hopes to see such products on the market soon.

ETF providers and asset managers are our customers at CME. They use our futures products to create other ETFs, to hedge structure projects, and we’re certainly trying to enable them to do the same type of strategy on Bitcoin. We want to make sure they have the risk-management tools they need to be successful in managing their risk. We’re working with them to make sure they have what they need for trying to introduce products such as an ETF.
 

Tim McCourt

Global head of equity index and alternative investment products, CME Grou

Recently, Christopher Giancarlo, the former head of the Commodity Exchange Commodity Trading Commission (CFTC), said recently that the launch of the CME Bitcoin Futures was a targeted action by the Donald Trump administration to eliminate the bubble in the cryptocurrency market.