According to BusinessInsider, the New York Stock Exchange has sent a filing to the United States Securities and Exchange Commission indicating that the exchange intends to launch five different Bitcoin ETFs (related exchange-traded funds) offering ‘bull and bear’ futures contracts on the Arca stock exchange.
According to NYSE, these Bitcoin ETFs will all be linked to the price of Bitcoin futures listed on the CME and CBOE exchanges, which launched their Bitcoin futures contracts in December 2017:
“The target benchmark’s value will be calculated as the last sale price published by the CME or the CBOE or any other US exchange that subsequently trades bitcoin futures contracts on or before 11 a.m. E.T.”
The 3 ‘Bull Funds’ are categorized as 1.25X, 1.5X and 2X, and offering 100%, 150%, and 200% returns on the given contract respectively.
As stated in the document sent to the Securities and Exchange Commission (SEC), the Bull funds are not intended to be traded any longer than a day – and offer percentage returns based on the given contract entered into:
“According to the Registration Statement, the 1.25X Bull Fund, 1.5X Bull Fund and 2X Bull Fund seeks daily leveraged investment results (before fees and expenses) that correlate positively to either 125% percent, 150% or 200% the daily return of the target benchmark.”
However, should the market move against their contracts, investors stand the chance of facing the same multipliers in loses:
“Conversely, its value on a given day (before fees and expenses) should lose approximately 1.25 times, 1.5 times or 2 times, as applicable, as much on a percentage basis as the level of the target benchmark when the benchmark declines.”
As the name suggests, the ‘Bears Funds’ allow investors the chance to leverage against a decline in the value of Bitcoin. The two funds offered are 1X and 2X, offering 100% and 200% gains should the contract meet its target on the given day of trading.
Once again, should the benchmark rise in value, Bear Fund investors stand to suffer loses compounded by the multiplier (1X or 2X) they’ve agreed to, as per the description of the 2X Bear Fund:
“If the 2X Bear Fund is successful in meeting its investment objective, its value on a given day should gain approximately two times as much on a percentage basis as the level of the target benchmark when the target benchmark declines. Conversely, its value on a given day should lose approximately two times as much on a percentage basis as the level of the target benchmark when the target benchmark rises.”
Granting this permission would make the NYSE the third American exchange to offer Bitcoin futures contracts after CME and CBOE, with CME and CBOE having been trading futures since last December.
With NYSE wasting no time in sending their application to the SEC, this shows that there is plenty of interest in Bitcoin by Wall Street money. While the likes of Merrill Lynch have denied its financial advisors from offering clients Bitcoin ETFs, exchanges are looking to set up of various Bitcoin-related investments.