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As the race for getting the approval of Bitcoin ETF gets intensified, CBOE President talks of the advantages of being first while getting the correct liquidity for the investment product.
Bitcoin price has been crashing with the overall cryptocurrency market after the SEC postponed its decision on the CBOE Bitcoin ETF to end of September 2018. In the last one week, Bitcoin has fallen from $8000 to making a low below $6000. Moreover, many crypto experts and analysts have predicted that the SEC can further extend its decision on the CBOE Bitcoin ETF to March 2019, with very slim chances this year.
The latest report from Bloomberg suggests that Cboe Global Markets Inc.still wants to be the first to get its Bitcoin ETF approved by the SEC. In a recent interview to the news publication, CBOE president and COO, Chris Concannon said:
“As we chip away at their issues to make them less concerned, at some point they’ll be comfortable with an ETF.”
Before postponing the CBOE Bitcoin ETF, the securities watchdog also rejected an ETF proposal from Winklevoss twins citing reasons that they were still not ready to handle the potential manipulation and associated risks of the highly unregulated cryptocurrency markets.
CBOE and CME Group were the first ones to launch the Bitcoin Futures in December 2017. This was one of the major pushes of getting Bitcoin into the mainstream financial market. Moreover, the Bitcoin futures provided by these two exchange giants operate completely in regulated markets and could also provide a base for the ETF product.
CBOE President Concannon said:
“Having the underlying futures come to market first, prior to an ETF, I think you have a healthier, more mature market. The problem with a futures-based ETF is, what is the right level of liquidity? It’s never been tested before.”
The CBOE Bitcoin ETF filing made in June 2018 focused on the fact that this investment product will invest only in Bitcoin for the benefits of the investors. For accredited market investors, CBOE will also facilitate over-the-counter (OTC) trades while insuring all the funds that are invested in Bitcoins. The SEC has previously also talked about insufficient insurance provided to the crypto investors against the risks posed by the cryptocurrency market.
Moreover, one of the major concerns for the SEC for introducing the Bitcoin-based ETFs has been the insufficient liquidity in the market. With more than eight months since the launch, the trading volumes of Bitcoin ETF has yet not matched commodities like gold and oil. Hence, the securities agency is looking for more liquidity to convincingly introduce the Bitcoin-related ETF products.
There has been a big ongoing race in the crypto industry for Bitcoin ETF to see which operator gets the first approval from the SEC.
“There’s a huge first-mover advantage in the ETF world…Once the assets come pouring in, it tends to continue. We’ve seen that in other ETFs,” Concannon said. “It’s a little bit shocking to me the attention this market gets versus its size. It’s a fifth of Apple. The entire crypto market is a fifth of Apple,” he further added commenting on the very small size of the crypto market.