Cboe, the world’s largest futures exchange, has filed for a bitcoin ETF with the US Securities and Exchange Commission (SEC), to enable investors in the public market to trade bitcoin.Bitcoin-Only ETF
The official document filed by CBOE with the SEC emphasized that the Trust, referring to Cboe, will only invest in bitcoin on behalf of investors. Essentially, Cboe will facilitate over-the-counter (OTC) trades amongst accredited investors in the traditional finance market, while insuring funds in bitcoin acquired by investors.
The document read:
“According to the Registration Statement, the Trust will invest in bitcoin only. The activities of the Trust are limited to: issuing Baskets in exchange for the cash and/or bitcoin deposited with the Cash Custodian or Trust, respectively, as consideration; purchasing bitcoin from various exchanges and in OTC transactions; delivering cash and/or bitcoin in exchange for Baskets surrendered for redemption; maintaining insurance coverage for the bitcoin held by the Trust; and securing the bitcoin held by the Trust.”
As of July, Cboe is one of the three financial institutions alongside SolidX and Gemini (Winklevoss twins) to file for a bitcoin ETF with the US SEC. The other ETFs were rejected by the SEC in 2017 due to lack of overseas regulations and price manipulation. At the time, leading cryptocurrency markets like Japan and South Korea did not have practical regulatory frameworks and policies in place to govern the cryptocurrency market.
“The Winklevoss ETF proposal was rejected because the SEC found that the significant markets for Bitcoin tend to be unregulated overseas markets that are potentially subject to price manipulation. But this creates a chicken and egg problem. How do we develop well-capitalized and regulated markets in the U.S. and Europe if financial innovators aren’t allowed to bring products to market that grow domestic demand for digital curren...