What is ETF?
Three magic letters: ETF. Exchange Traded Fund it is an investment fund whose aim is to faithfully reproduce the indicated index, and the shares are listed on the stock exchange. It is one of the easiest, most effective and least risky ways to earn a living in old age.
A key precipitating factor for introduction of bitcoin ETFs is the prospect of institutional capital entering the cryptocurrency space. “Better access means better price discovery and everything that gets us down that road, whether it’s the launch of futures of launch of an ETF, is a good thing,” said Hougan from Bitwise.
ETF Holy Grail for investors
Several financial giants commented that bitcoin-based ETFs are crucial for financial innovation, and companies such as JP Morgan already in February 2018 called them “a holy grail for owners and investors.” If the CBOE application is adopted in the coming month, investment options for customers will be launched in the first quarter of 2019.
Bitcoin ETF Rejected?
On Tuesday, July 24, the US regulator announced that the SEC had been postponed on the permission to offer Bitcoin ETF funds for the second half of September. The market has been waiting for the green light for ETFs for bitcoins for many months, which have the chance to encourage institutional investors to locate capital on the regulated market, which will directly translate into an increase in turnover of bitcoin itself.
The postponement of the term applies to funds proposed by the Direxion Asset Management investment firm. If the US Securities and Exchange Commission would have been negative about the proposal, the matter would probably be dealt with in a timely manner. However, a longer period was chosen to issue a decision on approval or rejection of the Direxion Asset Management proposal, which can be interpreted as a positive signal. An in-depth analysis and preparation of the Commission’s position in the above case will take several weeks. The final position will be announced on September 21, 2018.
The President of CBOE also argued in one interview that the gold and currency markets are much more fragmented, and the question of the appearance of ETFs on BTC in the CBOE offer is sealed and it is only a matter of time. Previous reports related to the creation of ETF funds on Bitcoin were repeatedly rejected by the SEC.
Direxion wants to launch the five following EFTs:
- Direxion Daily Bitcoin Bear 1X Shares;
- Direxion Daily Bitcoin 1.25X Bull Shares;
- Direxion Daily Bitcoin 1.5 Bull Shares;
- Direxion Daily Bitcoin 2X Bull Shares;
- Direxion Daily Bitcoin 2X Bear Shares.