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Screenshot of a breaking news alert e-mail from Q2 2017
Two new Bitcoin ETFs have been submitted for approval to SEC by Proshares Capital Management, according to the S-1 documents. The two new ETFs, ProShares Bitcoin ETF and ProShares Short Bitcoin ETF, will be involved in derivatives rather than actual bitcoin purchases.
According to the documents submitted by the fund, the ETFs will be traded at $25 per share, with a maximum offering price of $1 million in total.
Regarding the riskiness of investing in such types of ETFs, ProShares Capital Managements included a note regarding investing in Bitcoin:
“Bitcoin is a digital asset with a limited operating history. The performance of the Bitcoin Futures Contracts in which each Fund invests, and therefore the performance of the Funds, can be expected to be very different from the price of bitcoin. The value of a Fund’s investments in Bitcoin Futures Contracts may not be correlated with the price of bitcoin and may go down when the price of bitcoin goes up (and vice versa). An investor should only consider an investment in a Fund if he or she understands the consequences of investing in Bitcoin Futures Contracts.”
Such venture may be hard to accomplish, since this will be the first Bitcoin ETF to be launched, if SEC approves the submission, especially after the failed attempt of the Winklevoss twins to issue one.
Considering the volatility in price levels and perception about Bitcoin and other digital currencies, it may be natural to think that the submission by ProShares Capital will be rejected by SEC. However, there is a chance of the approval happening, especially with the great popularity and scale of digital cryptocurrencies.