The Chicago Board Options Exchange (CBOE) hopes to be the first U.S. exchange to list a Bitcoin ETF, an exchange-traded fund that tracks the price of bitcoin futures contracts.
According to documents posted on the exchange operator’s website, CBOE filed several proposed rule changes with the U.S. Securities and Exchange Commission (SEC) that would allow the exchange to list six Bitcoin ETFs on its trading platform.
Specifically, CBOE seeks to list Bitcoin ETFs from fund providers First Trust, GraniteShares, and REX. None of these funds will hold bitcoin directly; rather, they will trade futures contracts, meaning that their performance may diverge significantly from that of the asset itself. Notably, each of these fund providers has filed to create a “short” Bitcoin ETF that will track the inverse of the index, enabling investors to profit when bitcoin futures decline in value.
CBOE was the first U.S. exchange to list bitcoin futures, beating out fellow Chicago exchange CME by a full week. Exchange executives have already hinted that they hope to launch a family of cryptocurrency derivatives products, making it clear that the exchange desires to position itself at the cutting edge of the decentralized financial revolution.
But while CBOE was able to pull the rabbit out of its hat and become the first exchange to list bitcoin futures, it faces stiff competition in the race to bring the first Bitcoin ETF to market. Intercontinental Exchange (ICE), the operator of the New York Stock Exchange (NYSE), has already filed with the SEC to list two of ProShares’ proposed Bitcoin ETFs on NYSE Arca.
Nevertheless, although exchanges are jockeying to list the first Bitcoin ETFs, the SEC has still yet to signal whether it will approve these retail-friendly investment products. SEC regulators have been relatively accommodating to the burgeoning cryptocurrency industry, but bitcoin’s present volatility may make them hesitant to allow fund providers to wrap cryptocurrencies in products targeted at Main Street investors.
Write to Josiah Wilmoth at josiah.wilmoth(at)CCN.com.
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Last modified: March 4, 2021 5:02 PM