An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur.
Most ETFs track an index, such as a stock index or bond index. ETFs are usually bought and sold throughout the day on stock exchanges with market makers that determine the price of the ETF.
The first Bitcoin ETF was proposed in 2013, but has yet to be approved by the U.S. Securities and Exchange Commission (SEC).
The Winklevoss twins have filed for their own ETF, which is currently under review by the SEC. The SEC has delayed its decision on whether to approve the Winklevoss Bitcoin Trust ETF multiple times, most recently in July 2018.
The SEC’s primary concern with approving a Bitcoin ETF is volatility. Bitcoin prices are notoriously volatile, and the SEC is worried that this volatility will lead to investors losing money.
The SEC is also concerned about potential manipulation of the Bitcoin market if an ETF is approved. The SEC has yet to approve any cryptocurrency-based ETFs.
What Is Bitcoin ETF?
A Bitcoin exchange-traded fund (ETF) would be an investment vehicle that tracks the price of Bitcoin and trades on a stock exchange. A Bitcoin ETF would allow investors to get exposure to Bitcoin without having to buy or store the digital currency themselves. The first Bitcoin ETF was proposed in 2013 but has yet to be approved by the U.
Securities and Exchange Commission (SEC). The SEC’s primary concern with approving a Bitcoin ETF is volatility.