Bitcoin ETF has taken another bold step earlier today as the New York Stock Exchange (NYSE) became the latest platform to show interest in the digital currency. The NYSE filed with the security exchange commission SEC to list funds that are tracking bitcoin futures. According to the report, the two funds will be ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF, and they will make it possible for investors and traders to bet on the performance of bitcoin futures contracts.
ProShares which currently controls over $29 billion in assets back in September filed its document with the SEC for the two bitcoin ETFs above. According to the report, the ProShares funds would follow the movement of the either the Cboe or CME bitcoin futures. The funds would proceed to invest their assets in benchmark futures contracts, and will hold the option of diversifying their investment in contrast beyond the set benchmark. NYSE though told investors and traders that the funds wouldn’t possess bitcoins. They stated that “By being long Bitcoin Futures Contracts, the Fund seeks to benefit from daily increases in the price of the Bitcoin Futures Contracts. The Fund will not be benchmarked to the current price of Bitcoin and will not invest directly in Bitcoin. When the price of Bitcoin Futures Contracts held by the Fund declines, the Fund will lose value.”
According to the reports, Brown Brothers Harriman who is the custodian of the funds would be in charge of the investment assets and would equally handle cash equivalents. They will also be tasked with preparing and making regulatory findings.
Similar to other ETFs, those who invest in the ProShares Bitcoin ETF would only benefit when the value of the bitcoin futures contracts increases. According to their SEC filing, NYSE explained that “By being long Bitcoin Futures Contracts, the Fund seeks to benefit from daily increases in the price of the Bitcoin Futures Contracts. The Fund will not be benchmarked to the current price of bitcoin and will not invest directly in bitcoin. When the price of Bitcoin Futures Contracts held by the Fund declines, the Fund will lose value.”
This is opposite to what investors of the ProShares Short Bitcoin ETF would witness. Investors in the ProShares Short Bitcoin ETF would only benefit when the daily value of the bitcoin futures decreases, though this fund will also not be invested directly in bitcoin.
Analysts are of the view that if he NYSE successfully persuades SEC and launch their futures-tracking ETFs, then it will go a long way in aiding the legitimacy of the unregulated and highly volatile asset. Some believe that bitcoin might experience a fresh rally once NYSE’s filings are approved.