Institutional Investors May Start to Invest in Bitcoin

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Bitcoin, blockchain, and cryptocurrencies in general have been attracting the attention of important investors. But there are just a few ways for them to get involved in the cryptocurrency world. The Securities and Exchange Commission (SEC), released the information saying that formal proceedings are set to begin listing the first Bitcoin exchange-traded funds (ETFs).

SEC Considers Bitcoin ETFs

The SEC has officially initiated an inquiry in order to accept Bitcoin ETFs in the United States. This is an important information. With Bitcoin related ETFs, bitcoin futures contracts would have greater exposure, and will be able to diversify their portfolios by incurring in the cryptocurrency market.

SEC Logo

The SEC is working in order to adapt the legislation to list ProShare’s BTC ETFs. The SEC received different proposals and comments to modify the current rules.

The report reads as follows:

“The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act to determine whether the proposed rule change should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved, Rather, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.”

SEC takes formal action in order to adapt legislation to list ProShares’s BTC ETFs (futures-settled contracts, not purely asset-backed for now)

(This perhaps explains the ramp up in OTC buying activity last weeks)https://t.co/O7eI2twbty

— Foreground Capital (@ForegroundBlock) April 6, 2018

Other interested issuers have also requested to the SEC to launch Bitcoin ETFs. With the legal adoption of a Bitcoin-backed ETF, institutions would have it easier to invest in the cryptocurrency market. Furthermore, Bitcoin would see an increased liquidity.

Some days ago, the SEC’s chairman, Jay Clayton, explained that not all Initial Coin Offerings are fraudulent.

“I think if we don’t stop the fraudsters, there is a serious risk of a regulatory pendulum – the regulatory actions will be so severe that they will restrict the capacity of this new security,” Mr Clayton stated.

Blockchain ETFs Available on Nasdaq

Not only Bitcoin ETFs are attracting the attention of investors. Blockchain ETFs are available to be traded on Nasdaq and the New York Stock Exchange (NYSE).

The blockchain exchange-traded funds are Reality Shares Nasdaq NexGen ETF (BLCN) and Amplify Transformational Data Sharing ETF (BLOK).

The funds will be investing in blockchain companies, but both of them will have their own strategies. BLOK will be focused in small cap businesses, (in the long term could bring important gains), and BLCN will be focused on international corporations implementing blockchain solutions (reduced risk).

Reality Shares Co-Founder and CEO, Eric Ervin commented to Bloomberg:

“We think that Blockchain is going to be one of the most transformational technologies since the internet. In a very long term, cycles are going to play out and companies that are using blockchain in their businesses are going to be impacted both in increase of revenues and decreased fees and the overall structure.”

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