By
Bena Ilyas
April 23rd, 2024
ProShares, a leading provider of exchange traded funds (ETFs), has recently submitted two new Bitcoin ETFs to the SEC for approval.
According to the documents of Form S-1 publicly filed with the SEC on September 27, ProShares, which ranks 10th in the ETF industry, according to ETF.com, has recently submitted two new Bitcoin ETFs to the SEC for approval. The funds, ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF, both plan to purchase derivative contracts for exposure rather than to buy direct stakes in the cryptocurrency.
In concordance with the filing submitted by the fund, ProShares intends to reach the maximum aggregate offering price of $1 million by trading ETFs for $25 per share. The two new ETFs are to track Bitcoin futures contracts traded on Chicago Board of Options Exchange (CBOE) and on NYSE Arca exchange.
Taking into account 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.”
The application can be hard to accomplish as it will be the first Bitcoin product to be approved by the SEC and publicly launched. Especially doubtful it seems after the Grayscale’s announcement about NYSE Arca exchange’s withdrawal of the application for Bitcoin Investment Trust appeared on September 27 two days ago.
Commenting the recent rejection Grayscale’s representatives stated:
“Although digital currency market regulation continues to rapidly evolve, at this time Grayscale does not believe there have been enough regulatory developments to prompt the SEC to approve the application.”
However, the attempts to prompt the SEC approve Bitcoin ETFs will continue even in case of another failure. Specialists believe there is a real chance for public listing of the Bitcoin shares as the popularity and scale of digital currencies keep on growing.