The U.S. protection watchdog has stated that SEC to examine invested funds in bitcoin including mutual funds that involve stakes in bitcoin futures exchanges to verify stocks that comply with the Investment Company Act. The organization warned about the risks of investing in bitcoin futures markets due to the inherent levity of the underlying asset.
SEC Warns Funds About Bitcoin Futures
Yesterday, the Securities and Exchange Commission (SEC) released a public statement titled “Staff Statement on Funds Recorded Under the Investment Company Act Financing in the Bitcoin Futures Market,” where the company announced that “SEC to examine invested funds in bitcoin” they would ramp up diligence for funds that have funded in Bitcoin Futures Markets as part of their uncertain strategies to maximize earnings. The Division of Investment Management, a section of the SEC that oversees mutual funds and other investment commodities, would be the institution in charge of observing the behavior of these repositories.
The public report also urges these funds about the inherent levity of bitcoin, and consequently, about the buoyancy of bitcoin futures markets. The statement argues that:
Investors should consider the volatility of Bitcoin and the Bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying Bitcoin market.
The narrative SEC to examine invested funds in bitcoin highlights the absence of protection and price manipulation from third parties that the underlying asset can experience, feigning said markets.
The Division of Investment Management stated it would be observant on various issues, including investigating the liquidity of the market to verify if it has the liquidity to maintain these funds. Alongside this, observing the influence of these funds on the price of bitcoin, and examining the probability of deception or manipulation stirring these investment structures.
A Bitcoin ETF Could Be Approved Shortly
SEC to examine invested funds in bitcoin. The news is spreading so quickly in the USA, traders and strategists are studying for reasons and answers to find out the reasoning behind this announcement of SEC. Bitcoin faced a huge downfall in recent days. The value of the bitcoin varied from $58K to $42K. It is a huge downfall for any cryptocurrency in the world so far, but the traders and the masters of bitcoin such as Waqar Zaka are still hopeful and positive to see it rise again for up to $100K
The statement “SEC to examine invested funds in bitcoin” mentions it will assess through thorough investigation if the market can support the launch of a Bitcoin ETF. The SEC stressed that they would:
Consider whether, in light of the experience of mutual funds investing in the Bitcoin futures market, the Bitcoin futures market could accommodate ETFs, which, unlike mutual funds, cannot prevent additional investor assets from coming into the ETF if the ETF becomes too large or dominant in the market
Numerous projects for endorsement of a bitcoin ETF have been filed and denied by the SEC during the last few years, with its former Chairman Jay Clayton remaining admitted as a bitcoin skeptic in the crypto spheres. However, now that Clayton has abandoned his position in the organization, it seems that at least they are considering it.
This year, an excess of bitcoin ETF applications have been registered, as a result of the increasing matter for bitcoin due to the bull market, and even an ethereum ETF has been introduced. Nevertheless, the tone in which this statement is written is not too promising, which might mean it could take some more time before a cryptocurrency-based ETF gets approved in the United States.
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