Credit: Original article published by Coingape.

On Tuesday, May 11, the U.S. Securities and Exchange Commission (SEC) issued a warning for mutual funds that have exposure to Bitcoin futures and asked its investors to remain extremely cautious about it. With the parabolic rise in the BTC price over the last year, many hedge funds, insurance companies, endowments plans, pension funds, etc have been seeking exposure to BTC and its derivative products.

The SEC notes that while the Bitcoin derivative products are becoming increasingly popular, one must not forget that they are “highly speculative” and volatile in nature. The securities regulator asked investors to do their due diligence, weigh their risk appetite and examine the funds’ disclosures. As reported by Bloomberg, the U.S. SEC said:

“Investor protection and assessing the ongoing compliance of these funds is a top priority for the staff”. It further added that the agency “consider whether, in light of the experience of mutual funds investing in the Bitcoin futures market, the Bitcoin futures market could accommodate ETFs.”

The securities regulator said that it would initiate scrutiny while checking three major aspects.

  1. Look at the funds’ ability to liquidate their derivative in Bitcoin.
  2. Thoroughly analyze the Bitcoin futures market and see whether it “appropriately” support mutual fund investments in Bitcoin derivatives.
  3. Review the funds’ Bitcoin holdings and their valuations.

U.S. SEC and the Bitcoin ETF Approval

The U.S. market has been eagerly waiting for the launch of the first Bitcoin ETF. Many big financial giants have already submitted their proposals to the U.S. SEC for approval. Recently, the U.S. SEC delayed its decision for the approval of the VanEck Bitcoin ETF to June end.

In his latest remarks, SEC Chairman Gary Gensler expressed the need to work with the U.S. Congress to establish a clear regulatory framework for the working of crypto exchanges and crypto firms. Besides, he also called for updating the rules to control the social media manipulation of the market.

Although, Gensler is known for his crypto-friendly approach in comparison to his predecessor, his recent comments on Bitcoin and crypto speculations have hinted that Bitcoin ETF approval in the U.S. could possibly take more time than expected.

The post U.S. SEC Warns About Mutual Funds’ Exposure to Bitcoin (BTC) Futures appeared first on Coingape.

This article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. CryptosOnline.com does not provide investment, tax, legal, business or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any loss or damage caused or alleged to be caused by, or in connection with, the use of or reliance on any content, goods, services or opinions mentioned in this article.

#Bitcoin #Crypto #Cryptocurrency

Categories:

Tags:

Comments are closed

Translate

Our Other Projects

EdgyBranding.com - Premium Domain Names.

Notezi.com - Social Network

ParisArtwork.org - Mid-century Paris NFTs, tokenized on the WAX blockchain.

NewYorkArtwork.org - Mid-century New York NFTs, tokenized on the Ethereum blockchain and offered on Rarible.

Dexize.com - Ultra-Priviate DEX.

ClassicAutomobile.org - Classic Automobile News.