Unlikely Bitcoin and U.S. Treasury Securities Come Together for ETF Project
Over the last couple of years, various financial institutions and investment funds have filed applications with the United States Securities and Exchange Commission to operate cryptocurrency exchange-traded fund (ETF) securities, but not a single one has been approved. A few applicants have become frustrated by the process, thus resulting in the withdrawal of their filings, but others have paid close attention to the rule change proposals presented by regulators, and they have made interesting adjustments to their ETF applications. Such is the case with the Wilshire Phoenix and NYSE Arca United States Bitcoin and Treasury Investment Trust.
SEC Continues Showing Concerns about ETF
Both the New York Stock Exchange and its parent company have filed Bitcoin ETF applications with the SEC, and their standing in the financial trading world makes them attractive candidates to list the first cryptocurrency ETF on Wall Street; despite this prestige, SEC regulators have shown concerns about volatility and potential market manipulation. With regard to the former concern, NYSE Arca has added a different financial asset to its proposed ETF. Along with Bitcoin, short-term U.S. Treasury debt instruments will be managed within the Wilshire Phoenix fund.
The SEC has opened a period of public comment on the U.S. Bitcoin and Treasury Investment Trust, which makes it one of the ETF applications that have advanced the most in terms of approval. Another NYSE application is going through the public comments process, and the remaining ETF proposal belongs to the Chicago Board Options Exchange, a financial market that recently removed its Bitcoin futures contract.
What This Entails for the Future of Cryptocurrency Investment
The combination of U.S. debt securities and the world's most valuable digital currency may seem odd, but it also adds legitimacy to the ETF. Applicants have also secured custodial services and insurance for the purpose of providing greater appeal in terms of security for investors. It should be noted that the three aforementioned ETF applications were presented by giants in the financial exchange sphere. Still, the SEC continues to have doubts about the volatility in the digital currency markets, especially at a time when Bitcoin is going through a trading period that has featured 10 percent fluctuations within 15 minutes.
It remains to be seen whether ETF portfolio diversity will sway SEC regulators towards approval; what is known at this point is that the digital currency markets are in need of institutional investors, and this need will certainly be met with ETF securities listed on the world's largest financial exchanges.