Two new Bitcoin ETFs Submitted for SEC Approval

Two new Bitcoin ETFs have been submitted to the SEC for approval by ProShares Capital Management. According to Form S-1 dated September 27, ProShares Capital Management wants to create two bitcoin funds: the ProShares Bitcoin ETF and the ProShaers Short Bitcoin ETF. However, ProShares’ intent is not the actual purchase of Bitcoins, but its intent is to purchase derivated contracts for exposure.
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.
The document offers strong disclosure language regarding Bitcoin and potential losses, stating:

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.

It may be natural to think that the submission by ProShares Capital will be rejected by SEC due to the rejection of the Winklevoss twins’ attempt earlier this year. However, there is a chance of the approval happening, especially with the great popularity and scale of digital cryptocurrencies.

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