Time is almost nigh for the final SEC decision on the lesser known ETF proposal put forward by ProShares. With only 3 days until the deadline (August 23rd), is it likely that approval will be successful, or will we see another rejection?
Originally filed in early December 2017 the ProShares ETF will be backed by bitcoin futures contracts and not connected to actual Bitcoin holdings. Instead, it’s value will be derived from Bitcoin futures contracts and their performance on exchanges such as Cboe futures and CME exchanges. Furthermore, contrary to the recent delay of VanEck ETF decision, this final deadline is exactly that, final.
ProShares is one of the leading providers of ETFs, often specializing in funds that leverage the underlying performance of an index in both corresponding and inverse correlations. The obvious benefit of such a company proposing a BTC ETF (especially over the rejected Winklevoss proposal) is expertise.
Although this derivative type BTC ETF is based upon Bitcoin futures and not physical Bitcoin holdings, many believe that the ProShares proposal will set a precedent for following ETF decisions, meaning that if it is successful, the subsequent VanEck ETF decision in September may have a higher chance of approval.
This sentiment is echoed by Jake Chervinsky an American attorney, who stated the importance of the upcoming ETF on Twitter:
2/ These ETFs are important: they're the first ones that the SEC will approve or deny in 2018 & will set the stage for others in coming months.— Jake Chervinsky (@jchervinsky) August 17, 2018
Of course, nobody knows what the SEC will decide, but we can use their recent statements to figure out what factors they'll consider.
Chervinsky goes on to talk about certain determining factors, citing concerns the SEC had with potential BTC ETFs. One notable difference between the Winklevoss and ProShares proposal is the fact that the latter would use the regulated Cboe futures and CME exchanges rather than the Nascent Gemini exchange which remains unregulated.
However, Chervinsky goes on to caveat that the derivatives based ETF proposed by ProShares may not affect the market price of Bitcoin, due to the fact that it doesn’t actually require the buying or selling of BTC.
Only time will give us a definitive answer, and that time is drawing ever closer…