Securities and Exchange Commission has been quite generous with the approval of Bitcoin futures ETF; now, would it be wise to implicate further requests and applications that are too out there to get approval from the SEC? The answer should be; forget it. But the investors and traders out there are not getting this point, and they want to request SEC to approve a leveraged Bitcoin ETF. This is the kind of ETF that would allow investors to bet against Bitcoin futures contracts; it is not only tricky but extremely dangerous in its own doing.
This way, investors either stand to make a whole lot from it, betting against the market, or they should be ready to lose everything they have. This is how a leveraged ETF works; it allows the investors to short a specific commodity or stock which the ETF is exploring. Commission has deemed it fit not to go through with this kind of approval, sources report. It is not official yet, and the Securities and Exchange Commission has not come out to give their official statement too. It is reported that SEC might have directed at least one asset manager to completely ignore the plan and not to go through with these kinds of investment products.
Limited Exposure to Bitcoin Products
This is to ensure that the investors and traders have limited exposure to Bitcoin-oriented digital products and redirect their focus on unleveraged exposure. It is not like the Securities and Exchange Commission is worried about these smart investors shortening the whole crypto market, doing what they do best, but it is for everyone’s own safety. The crypto market is extremely volatile as it is, and therefore precautionary approach should be practised while testing a variety of Bitcoin products being made available to investors and traders.
It is possible that SEC might approve these kinds of ETFs further in the future, but it is not happening this time around. The Commission has just turned the corner on Bitcoin-oriented digital products, and investors should feel lucky that they have a futures product for Bitcoin available and trading.