US Congressmen sent SEC letter to approve a spot market Bitcoin ETF
In a letter sent on Wednesday, Representatives Tom Emmer and Darren Soto questioned why the Securities and Exchange Commission(SEC) denied trading to commence in exchange-traded fund (ETF) based on spot Bitcoin (BTC) but approved Bitcoin futures exchange-traded fund (ETFs) to begin trading.
"We question why, if you are comfortable allowing trading in an ETF based on derivatives contracts, you are not equally or more comfortable allowing trading to commence in ETFs based on spot Bitcoin," the congressmen wrote in the letter.
Adding, "Bitcoin spot ETFs are based directly on the asset, which inherently provides more protection for investors."
Investors prefer spot-based ETFs over futures-based ETFs, according to Emmer and Soto, because they provide direct exposure to the asset. Futures ETFs, on the other hand, are based on derivatives.
Also Read |
Also Read |Lending platform Cream Finance suffered the loss in Flash Loan Attack
The purpose of ETFs is to provide investors with price exposure to different stocks and bonds by tracking the price of these assets. Retail investors can utilize ETFs to diversify their retirement and savings portfolios.
In an ETF, instead of buying BTC on a cryptocurrency exchange, one could buy it on a stock exchange and trade it. That way, people who are not interested in buying and storing Bitcoin can still participate in the market.
In order to prove their claim, they compared gold spot and futures ETF markets. Futures gold ETF DB Gold Fund (DGL) trades for only $50.4 million, while the spot-based SPDR Gold Trust (GLD) has traded for over $55.5 billion in the last 15 years.
A ProShares Bitcoin Strategy ETF experienced the highest first-day natural volume ever in October. The SEC will not be leading federal efforts to regulate stablecoins, as had been expected. Earlier, the Bitcoin ETF was also rejected by the securities regulator.
CBW - External Analyst
The Digital Euro: Revolutionizing European Payment Systems
False hours ago