Category Archives: Direxion Asset Management

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Index Exchange-Traded Fund Registrations Stacking up at the SEC

Bitcoin-related exchange-traded funds (EFTs) registrations appear to be stacking up at the US Securities and Exchange Commission (SEC) with both Bitwise and investment firm Direxion Asset Management firmly in line.

Now joining VanEck and SolidX in the queue for decisions for ETF approvals, Direxion itself may have to wait another two months for approval of five proposed funds. The New York Stock Exchange’s submission in January suggested that the funds would offer investors “the opportunity to obtain daily short, leveraged long or leveraged short exposure to the lead month bitcoin futures contract” traded on exchanges that trade in Bitcoin futures contracts.

As reported by Bitcoin News earlier today, it has become a common opinion that one of the factors propelling Bitcoin on its current run is the anticipation of the outcome of the awaited SEC decision on ETFs.

CNBC’s Brian Kelly is one who has such a view. He cites the ETF drive currently bubbling at the SEC as a pivotal factor. Bitwise’s Global Head of Research Matt Hougan wants to get things moving as he feels that ETFs will offer another facet to trading, commenting:

“Our research shows that an index-tracking basket of multiple cryptocurrencies behaves differently than a single coin. As such, we think both sorts of exposure need to be looked at by investors when considering the growing cryptocurrency space. Our view is that this new area has many similarities to the introduction 10 to 15 years ago of commodity ETFs.”

The SEC has made no comments regarding the Chicago Board Options Exchange (CBOE) ETF proposal submitted last month and with SolidX and VanEck offering to list an ETF based on Bitcoin, rather than futures, heads have turned. Reportedly, after this fact was revealed, the SEC reportedly received over 250 comments on their website in response.

Another in the SEC waiting room, Bitwise Asset Management, says its plan is to launch what it calls “the first publicly-offered cryptocurrency index exchange-traded fund (ETF)”. Its Hold 10 index aims to capture 80% of the total market capitalization of the cryptocurrency market.

Brian Kelly has already said he doubts if the SEC will even approve the ETF applications this year, and some analysts have other doubts about the volatility of funds due to ETF and are pretty scathing. Michael Cohn, chief investment strategist at Atlantis Asset Management said earlier this year:

“[It] would be insane for them to actually approve this. Then they’re putting a rubber stamp on it as an asset, and I don’t think governments want to go there yet. It just seems as though it’s not something I’d want to put my clients into in any way, shape or form. You can only be embarrassed.”

 

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