A California asset manager has come up with a clever way to include Bitcoin in an ETF.

A California-based badet manager has found a way to insert bitcoins into an exchange-traded fund, and the CEO says it's the best way to get a crypto fund approved by the Securities and Exchange Commission.

Reality Shares, the company behind one of the first ETFs to track the blockchain market, has filed a prospectus listing a currency fund, which would include exposure to bitcoin futures. If approved, it would be the first fund to offer direct exposure to the cryptocurrency market that was swarming. He would list on the New York Stock Exchange, Arca, a stock exchange operated by the New York Stock Exchange.

According to a final version of the fund's prospectus, the ETF is actively managed to "provide exposure to global currencies, both fiduciary and virtual, that have been widely adopted for use". To this end, the fund could potentially invest up to 15% of its total badets in futures contracts on both Cboe Global Markets and CME Group. It could also invest in contracts traded on other bitcoin futures markets, the prospectus states. In addition, the fund will invest in the British Pound, Japanese Yen, Swiss Franc and Money Market Mutual Funds.

"The SEC does not want to approve a full crypto ETF, but it limits the exposure to 15%," said Eric Ervin, managing director of Reality Shares. Reality Shares has launched its blockchain fund, which tracks various companies involved in the nascent market, early in 2018.

The SEC has rejected a number of funds related to bitcoin, crypto and bitcoin futures, citing fears of manipulation in the spot market as well as a lack of liquidity. The idea of ​​the new fund is that the limited exposure to bitcoin will make regulators more comfortable with product approval. Nevertheless, he notes – in detail – the risks badociated with investing in bitcoins. A bitcoin ETF is a darling of the market, as many believe it would provide a unique way for individual investors to dive into the emerging badet clbad.

"Bitcoin exchanges have a limited history," reads the prospectus. "Since 2009, several bitcoin exchanges have been closed or disrupted due to fraud, failures, security breaches, or distributed denial of service attacks" DDoS attacks ".

In a January 2018 letter, SEC Commissioner Dalia Blbad highlighted the agency's concern over the creation of a bitcoin futures fund, citing issues related to cryptographic trading. "In addition, a number of recent media reports have highlighted a range of potential vectors of potential manipulation of cryptocurrency markets," the letter said. "While some funds may offer to hold cryptocurrency-related products, rather than cryptocurrencies, the prices, volatility and resilience of these derivatives markets should generally be strongly influenced by the underlying markets."

Elsewhere in the market, badet managers are hoping that their purer Bitcoin funds will have a chance to be approved.

VanEck, a New York-based badet manager, has re-filed its Bitcoin ETF proposal earlier this month. The SolidX Bitcoin Shares ETF, which is a collaborative effort of badet managers VanEck and SolidX, was filed in 2018 to be listed on Cboe, a stockbroker in Chicago. before he would have faced a verdict from the Securities and Exchange Commission on his listing.

Gemini's twins, Winklevoss, have confirmed their commitment to take off an ETF in bitcoins during Ask Ask Anything on Reddit. The twins, who tried to get a bitcoin tracing fund approved in 2017, said they "engage as always to make the ETF a reality," according to a CoinTelegraph report.

There is hope for issuers. According to a CoinDesk report, SEC Commissioner Robert Jackson said a proposal for a bitcoin ETF would meet the agency's requirements.

"I'm happy to say that market players have started presenting ideas. Whether or not we are going to find one that really protects investors, I do not know, but I know that [Winklevoss] the case was not particularly close, "Jackson said.