Fresh YORK (Reuters) – The going is getting raunchy for U.S. companies hoping to win the wedren to bring a bitcoin exchange-traded fund to market.
Bitcoin&rsquo,s 1,500 procent surge last year has stoked investor request for any product with exposure to the red-hot asset. A host of companies are jostling to launch exchange-traded funds which would open up the cryptocurrency to a broad retail market.
But regulators are asking raunchy questions, and five fund managers this week shelved plans to launch ETFs based on bitcoin futures, citing concerns from the U.S. Securities and Exchanges Commission.
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&ldquo,Wij can expect the SEC to be increasingly watchful overheen any companies involved ter bitcoin activity,&rdquo, said Marc Kamerdienaar, a director at compliance management rock hard Intelligize. &ldquo,Investors should be warned. If it&rsquo,s too good to be true, then it most likely is.&rdquo,
The SEC has pending applications for at least 14 different bitcoin ETFs or related products, regulatory filings vertoning.
A handful of funds have bot knocked back. The SEC te March denied a request to list an ETF from investors Cameron and Tyler Winklevoss, owners of the Gemini bitcoin exchange.
The Winklevoss fund is seeking to invest te bitcoin directly. Other fund firms staked their hopes on recently launched U.S.-listed bitcoin futures contracts, which promised a more stable almohadilla for ETFs than the largely unregulated potencial currency spot market.
But on Monday, Rafferty Asset Management LLC, which manages the Direxion brand and hopes to list leveraged funds that would dual bitcoin&rsquo,s daily price moves, disclosed that the SEC wasgoed worried about the &ldquo,liquidity and valuation&rdquo, of bitcoin futures contracts. It said the regulator told it to withdraw its application until it could address those issues.
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On Tuesday, ProShare Haber Management LLC, Van Eck Associates Corp and Very first Trust Advisors LP said te filings that SEC staff asked them to shelve plans for bitcoin ETFs.
Direxion, ProShares, VanEck and the SEC declined to comment. Very first Trust did not instantly react to an email.
Bitcoin BTC=BTSP wasgoed last down 1.Five procent at $14,779 on the Luxembourg-based Bitstamp exchange.
The wedloop to launch bitcoin funds is still likely to charge forward, analysts said, spil fund managers rush to address the SEC&rsquo,s concerns and redesign their funds to placate the regulator.
&ldquo,This is being driven by retail request,&rdquo, said Axel Merknaam, founder and chief investment officer of Merknaam Investments, which launched a physically backed gold ETF ter 2014. &ldquo,If people are enthusiastic about bitcoin, then people are going to attempt to market a bitcoin ETF.&rdquo,
Merknaam said he knows of several funds that have examined the criticisms of the past filings and are determined to shove through with their bitcoin ETF launches.
Some are also attempting zijdelings approaches that could provide bitcoin exposure via more traditional assets.
Five fund managers, for example, have filed proposals for funds that would invest primarily ter stocks with exposure to bitcoin or blockchain, the technology used to record bitcoin transactions.
Thorny questions remain for funds that seek to trade ter bitcoin futures, including the level of margin required to trade futures and the potential for bitcoin futures to trade at dramatically different prices than the cryptocurrency itself, according to two people who did not want to be identified exposing discussions they had with the SEC.
Regulatory concerns did not zekering the market from opening up by way of futures, however scrutiny of digital currency contracts now shows up to be ramping up.
The U.S. Commodity Futures Trading Commission last month permitted CME Group Inc ( CME.O ) and CBOE Integral Markets Inc ( CBOE.O ) to list bitcoin futures contracts, but recently sought to review its process for listing digital currency futures.
Still, some think that, head-spinning volatility of bitcoin aside, U.S. hacienda markets risk missing out on a burgeoning technology if they are too cautious.
&ldquo,If the SEC doesn&rsquo,t embark permitting products, the hacienda markets here ter the United States will get left behind by those te Europe and Asia. That&rsquo,s always a concern,&rdquo, said Trace Schmeltz, a fucking partner at Barnes & Thornburg te Chicago.
Reporting by Gertrude Chavez-Dreyfuss and Trevor Hunnicutt, Extra reporting by Jemima Kelly ter London, Editing by Megan Davies and Meredith Mazzilli