Bitcoin futures exchange-traded funds could begin trading on US exchanges as early as next week with the SEC set to approve the products.
Sources familiar with the matter told Bloomberg that the regulator is unlikely to prevent the products from starting to trade. While previous Bitcoin ETF applications have been rejected by the regulator, however, proposals from ProShares and Invesco remain pending and were filed under rules which the SEC Chairman has said provide “significant investor protection.”
“The SEC approving of bitcoin ETFs opens up institutional and retail access much more readily,” said Will Morris Sales Trader at the UK based digital asset broker GlobalBlock.
Morris explained that SEC approval of ETFs would give institutional investors, which are still risk averse and wary of bitcoin investments, a way of offering retail clients a regulated form of crypto exposure.
The new ETFs will be based on bitcoin futures that already trade on the Chicago Mercantile Exchange meaning that they are not physically backed, however Will said approval for products providing more direct exposure to Bitcoin could be upcoming.
“When there’s a physically backed ETF which I think is potentially in the offing that’s when bitcoin will go parabolic,” he said.
Advocates have have seen the approval of ETFs as confirmation of mainstream acceptance for cryptocurrencies since Cameron and Tyler Winklevoss first filed an application for a Bitcoin ETF in 2013.
The SEC has previously warned investors off investing in crypto currencies dubbing them “highly speculative.”
News that the products could win approval comes days after a deputy governor for the Bank of England warned that Bitcoin should be regulated ‘as a matter of urgency’ and warned that a ‘massive’ market crash was plausible.
The price of Bitcoin has risen 2.6 per cent in the past 24 hours to stand just below $60k, taking the king of crypto to heights last seen in April.