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Cboe Floods the SEC with Bitcoin ETF Petitions

Julio Gil-Pulgar · @gil_pulgar | Dec 23, 2017 | 14:00

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Cboe Floods the SEC with Bitcoin ETF Petitions

Julio Gil-Pulgar · @gil_pulgar | Dec 23, 2017 | 14:00


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The Chicago Board Options Exchange (Cboe) has been successfully trading Bitcoin futures since December 10, 2017. As a result, Cboe is now trying to expand its participation in the cryptocurrency business. In effect, Cboe has just petitioned the U.S. Securities and Exchange Commission (SEC) to launch six Bitcoin-based exchanged traded funds (ETFs).


The Push for ETFs Heats up

CBOE Announces Increased Bitcoin Futures Margins Amid Market Manipulation Worries

SEC’s authorization to trade Bitcoin futures contracts elevated the cryptocurrency into the circle of mainstream finance, setting the stage for the launching of Bitcoin ETFs. In fact, even a couple of days before the rollout of Bitcoin futures, three fund managers had each requested SEC approval for Bitcoin ETFs: First Trust Advisors LP, Van Eck Associates Corp., and REX Shares LLC.

Most recently, CNBC reports, Cboe Global Markets requested the SEC’s approval to list the following Bitcoin-related ETFs:

First Trust Bitcoin Plus Strategy ETF
First Trust Inverse Bitcoin Strategy ETF
REX Bitcoin Strategy ETF
REX Short Bitcoin Strategy ETF
GraniteShares Bitcoin ETF
GraniteShares Short Bitcoin ETF

Moreover, according to an ETF Trends report, NYSE Arca, Inc. also submitted a petition, dated December 19, to list and trade shares of the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF. NYSE Arca is a U.S. electronic security exchange that trades both stocks and options.

CBOE Succeeds with Its First Week of Trading Bitcoin Futures

CBOE started trading Bitcoin futures contracts (XBT) only ten days ago, as of this writing. On the closing of the first day of trading, in spite of website congestion due to heavy traffic, CBOE posted a volume of over 4,000 contracts. Since then, the daily volume of Bitcoin futures traded has been increasing, as shown in the graph below:

CBOE Succeeds with Its First Week of Trading Bitcoin Futures

These results have encouraged CBOE executives to double down on the cryptocurrency by wanting to launch Bitcoin-related ETFs. In this regard, CNBC reports that a CBOE spokesperson said:

Given the success of the launch of our bitcoin futures, several partners are very interested in moving forward with the development of an exchange-traded product.

At present, the cryptocurrency is rapidly recovering from one of its worse plunges. Bitcoin dipped to about $11,000 USD, at 11:00 ET, on December 22. However, in less than 12 hours, Bitcoin had risen above $16,00, displaying once again its spectacular resiliency.

Coinbase Bitcoin chart - 12/23/17

Financial experts increasingly understand that volatility is an inherent feature of the cryptocurrency. For example, according to CNBC, Tony Lee, Co-founder of Fundstrat, increased mid-2018 Bitcoin’s price target to $20,000 USD, from $11,000 USD. He made this decision on December 22, a day of high volatility.

If the SEC authorizes any Bitcoin ETFs, many believe that interest from retail as well as institutional investors and their billions of dollars could drive Bitcoin’s value to incredible highs.

What do you think about the potential impact of the SEC approval of Cboe’s Bitcoin-related ETFs? Let us know in the comments below.


Images courtesy of AdobeStock, Coinbase, Cboe, Bloomberg


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