SEC to Scrutinize Funds Invested in Bitcoin Futures

Hey there! Before reading the article which is about SEC to Scrutinize Funds Invested in Bitcoin Futures, you should read about bitcoin etf approval 2020. It shares basic information about this article and also adds more value to it. Do let us know how you feel about it in the comment section below. Happy Reading! Really glad that you are here.

Register now on Binance, add 50$ and get 100$ bonus voucher!

Bitcoin is a decentralized virtual currency, which allows users to pay for goods and services online without the need for banks or government agencies to issue or redeem such currency. Bitcoin surged in value in 2017, peaking at nearly $20,000 per unit in December. The cryptocurrency has since lost more than half its value, but continues to be discussed as an investment option. In the past, the Securities and Exchange Commission has warned investors about the risks associated with virtual currencies, but this may be a sign that the SEC is taking a more active role in combating fraud in the Bitcoin market.

Financial regulators have given the green light to the first exchange-traded fund that lets investors buy into the red-hot cryptocurrency market. The Bitcoin Investment Trust is set to start trading Dec. 20 with shares listed on OTC Markets Group Inc.’s OTCQX. The fund’s sponsor is Grayscale Investments LLC, a subsidiary of Digital Currency Group Inc., Bloomberg reported.

The U.S. Securities and Exchange Commission has announced that it will closely monitor mutual funds that invest in bitcoin futures markets to ensure that the funds comply with the Investment Company Act. The institution warned of the dangers of investing in bitcoin futures markets due to the implied volatility of the underlying asset.

SEC warns funds against bitcoin futures

Yesterday, the U.S. Securities and Exchange Commission (SEC) issued a public statement titled Staff Statement on Funds Registered under the Bitcoin Futures Investment Company Act, indicating that it will increase its vigilance over funds that invest in bitcoin futures markets as part of their speculative strategies to maximize returns. The Division of Investment Management, the division of the SEC that oversees mutual funds and other investment products, will be the agency responsible for overseeing the conduct of these funds.

The public statement also warns these funds about the implied volatility of bitcoin and, by extension, the volatility of bitcoin futures markets. The statement states that:

Investors should consider the volatility of bitcoin and the bitcoin futures market, as well as the lack of regulation and the possibility of fraud or manipulation in the underlying bitcoin market.

The statement notes the lack of protection and the price manipulation by third parties to which the underlying may be exposed by influencing these markets.

The Investment Management Department announced that it will be monitoring several aspects, including an analysis of market liquidity to see if the liquidity is there to support these funds. This goes hand in hand with monitoring the impact of these funds on the bitcoin price, and analyzing the possibility of fraud or manipulation with these investment vehicles.

Bitcoin ETF may be approved soon

According to the statement, the market’s ability to support the launch of a bitcoin ETF will be thoroughly assessed. The SEC emphasized that it will:

Consider whether the bitcoin futures market could accommodate ETFs, given the experience of mutual funds investing in the bitcoin futures market, which, unlike mutual funds, cannot prevent additional investor money from flowing into ETFs if they become too large or dominate the market.

Register now on Binance, add 50$ and get 100$ bonus voucher!

The SEC has introduced and rejected several proposals to approve bitcoin ETFs in recent years, with former commission chairman Jay Clayton considered a cryptocurrency skeptic. But now that Clayton has resigned from his position with the institution, it seems they are at least considering it.

There have been many requests for bitcoin ETFs this year due to the growing interest in bitcoin because of the bull market, and there has even been a proposal for an Ethereum ETF. However, the tone in which the statement is written is not overly optimistic, which could mean that it will be some time before a cryptocurrency ETF is approved in the US.

What do you think of the SEC’s investigation into funds investing in bitcoin futures? Tell us what you think in the comments section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.

This source has been very much helpful in doing our research. Read more about bitcoin fund and let us know what you think.

Related Tags:

bitcoin etf approval 2020bitcoin pricegrayscale bitcoin trustbitcoin fundbitcoin etf vanguardnydig bitcoin strategy fund,People also search for,Privacy settings,How Search works,bitcoin etf approval 2020,bitcoin price,grayscale bitcoin trust,bitcoin fund,bitcoin etf vanguard,nydig bitcoin strategy fund,bitcoin etf usd,bitcoin news

Register now on Binance, add 50$ and get 100$ bonus voucher!

Recent Articles

Tonga accepts Bitcoin donations amid tsunami onslaught

A small island of Tonga has been hit by a tsunami, and the country is calling for donations in Bitcoin. The nation’s Prime Minister...

How to Buy Solana (SOL) in India

It is important to know how you can buy SOL in India. It’s no secret that the Indian market has only recently begun to...

How to Buy Flow (FLOW) in India

Flow is a cryptocurrency that was introduced in June 2018. It uses the Ethereum blockchain platform, but has its own built-in digital currency called...

Moonbeam Goes Live on Polkadot, Becomes its First Fully Operational Parachain

Moonbeam, the world’s first fully operational on chain scaling solution was released into the wild this week. The Polkadot-powered platform aims to provide scalability...

Stacks ecosystem becomes #1 Web3 project on Bitcoin

The Ethereum blockchain, which powers the Stacks ecosystem’s token STX, has become the most important web3 project on Bitcoin. The announcement is a sign...

Related Stories