SEC Staff Stated Bitcoin Is Highly Speculative, Showing ETF Skepticism

SEC staff stated that bitcoin is still a highly speculative asset and the staff intends to determine whether the BTC futures market could accommodate ETFs as the note said, which we are reading more about in our latest Bitcoin news today.

The US Securities and Exchange Commission or the SEC staff stated that the Bitcoin market volatility means that it is not ready to support an exchange-traded fund though it is monitoring the digital asset sector and seeks input. BTC is a highly speculative asset read the statement that was published by the Division of Investment Management. The note warned that investors in mutual funds trading BTC futures could be taking on more risks than they know.

The warning came as high-profile funds from BlackRock, Morgan Stanley and more, started diversifying into BTC through adjacent products like Cash-settled BTC futures and Grayscale’s Bitcoin Trust. The bets represent huge steps in the institutional adoption trend over the past 12 months.
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While aiming at investors in mutual funds, the note of the SEC has implications for BTC ETFs which crypto proponents were hoping to see for years.

“The staff among other things expect to … consider whether, in light of the experience of mutual funds investing in the Bitcoin futures market, the Bitcoin futures market could accommodate ETFs, which, unlike mutual funds, cannot prevent additional investor assets from coming into the ETF if the ETF becomes too large or dominant in the market, or if the liquidity in the market starts to wane.”

The robust BTC futures market was key to launching an ETF as Bitwise Asset Management Chief Investment Officer Matt Hougan said. While still being aimed at investors in mutual funds, the note has implications for BTC ETF which crypto proponents await for years:

“The staff among other things expect to … consider whether, in light of the experience of mutual funds investing in the Bitcoin futures market, the Bitcoin futures market could accommodate ETFs, which, unlike mutual funds, cannot prevent additional investor assets from coming into the ETF if the ETF becomes too large or dominant in the market, or if the liquidity in the market starts to wane.”

A robust BTC futures market is key to launching an ETF as Bitwise Management Chief Investment Officer Matt Hougan explained.