CBOE Prods SEC on Bitcoin ETF Approval in New Letter

TL;DR:

Cboe Markets advocates for the approval of a bitcoin ETP in a letter to the U.S. Securities and Exchange Commission. The letter comes from Cboe President Chris Concannon. It does not directly push the agency to approve such a product but lays out the potential benefits an approved ETP could have on the industry. He wrote: “While the current bitcoin futures trading volumes on Cboe Futures Exchange and CME may not currently be sufficient to support ETPs seeking 100% long or short exposure to bitcoin, Cboe expects these volumes to continue to grow and in the near future reach levels comparable to those of other commodity futures products at the time that they were included in ETPs.”


A senior executive for Cboe Global Markets believes that the market could support the launch of a bitcoin exchange-traded product (ETP), according to a new letter sent to the U.S. Securities and Exchange Commission.

Chris Concannon, the firm’s president, didn’t directly push the agency to approve such a product. Rather, he cited data collected by the company through its launch of bitcoin futures late last year to make the argument that the market is moving toward being able to support an ETF.

His letter was a response to a January release from the SEC, in which it outlined its concerns over approving an ETF, citing market fragmentation and investor protection shortfalls in particular.

In his response, Concannon noted that although they are young, the bitcoin commodity markets “are developing quickly,” which is promising for future exchange-traded products (ETPs).

Concannon added:

“While the the current bitcoin futures trading volumes on Cboe Futures Exchange and CME may not currently be sufficient to support ETPs seeking 100% long or short exposure to bitcoin, Cboe expects these volumes to continue to grow and in the near future reach levels comparable to those of other commodity futures products at the time that they were included in ETPs.”

Furthermore, he wrote that he sees the markets for government-issued currencies and gold as being “probably more fragmented” than cryptocurrency markets, noting that “there are a lot of venues to access currency markets.”

“While Cboe shares many of the concerns raised in the Staff Letter, we believe that the vast majority of these concerns can be addressed within the existing framework for commodity-related funds related to valuation, liquidity, custody, arbitrage, and manipulation,” the letter noted.

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