The US Securities and Exchange Commission (SEC) reiterated the risks of investing in Bitcoin Futures-focused funds, with a staff note on Thursday highlighting the tough battle US Bitcoin Exchange Traded Funds (ETFs) are facing.
In an investor bulletin emailed from CoinDesk, the staff urged “Investors considering a fund with exposure to the Bitcoin futures market to carefully consider the potential risks and benefits of investing,” the company said Note and warn investors that cryptocurrency is “highly speculative” as an investment.
This is the SEC’s second recent warning regarding Bitcoin’s risk. Last month it sent a Notice to investors Stresses that due to the volatility of Bitcoin, it may not yet be safe to support an exchange-traded fund under the Investment Advisers Act of 1940.
Most Bitcoin ETF applications are filed under a different law, the Securities Act of 1933, as those laws differ in how such applications are handled. The SEC has long warned against filing Bitcoin products under the ’40 Act.
This comes at a time when large traditional banks and mutual funds are increasingly showing interest in cryptocurrencies, both for individuals and businesses. March, Morgan Stanley investment bank started offering customers access to bitcoin funds, and in May Wells Fargo announced the launch of a cryptocurrency fund.
Just yesterday, CoinDesk reported that investment bankers Ken Moelis started exploring the crypto space as a potential business opportunity.