Home Community Insights SEC Delays Franklin Templeton’s Spot Bitcoin ETF application, JPMorgan Tests Tokenized Assets

SEC Delays Franklin Templeton’s Spot Bitcoin ETF application, JPMorgan Tests Tokenized Assets

SEC Delays Franklin Templeton’s Spot Bitcoin ETF application, JPMorgan Tests Tokenized Assets

The US Securities and Exchange Commission (SEC) has postponed its decision on the spot Bitcoin exchange-traded fund (ETF) proposal filed by Franklin Templeton, one of the world’s largest asset managers with over $1.5 trillion in assets under management. The SEC announced on Monday that it will extend the 45-day review period for the Franklin Templeton Bitcoin ETF by another 45 days, pushing the deadline to January 3, 2024.

The Franklin Templeton Bitcoin ETF, if approved, would be the first of its kind in the US to track the performance of Bitcoin directly, rather than through futures contracts or other derivatives. The fund would hold Bitcoin in cold storage and use a third-party custodian to ensure the security and integrity of the assets. The fund would also use a proprietary index to calculate the net asset value (NAV) of the ETF, based on the prices of Bitcoin across multiple exchanges.

The SEC has been cautious about approving spot Bitcoin ETFs, citing concerns over market manipulation, fraud, custody, liquidity, and investor protection. The regulator has rejected several applications for spot Bitcoin ETFs in the past, while approving four Bitcoin futures ETFs in October. However, some experts argue that spot Bitcoin ETFs would be more beneficial for investors, as they would offer lower fees, more transparency, and more exposure to the underlying asset.

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The SEC’s delay on the Franklin Templeton Bitcoin ETF comes amid a growing demand for crypto-related products and services from institutional and retail investors. According to a recent report by Fidelity Digital Assets, 90% of institutional investors surveyed expect to have an allocation to digital assets by 2026, while 52% already have some exposure. Moreover, a survey by Franklin Templeton itself found that 40% of financial advisors are interested in adding crypto to their clients’ portfolios.

The SEC’s decision on the Franklin Templeton Bitcoin ETF could have a significant impact on the crypto market, as it could set a precedent for other spot Bitcoin ETF applications that are pending or in the pipeline. Some of the other firms that have filed for spot Bitcoin ETFs include VanEck, Valkyrie, WisdomTree, NYDIG, and Galaxy Digital. The approval of a spot Bitcoin ETF could also boost the adoption and legitimacy of Bitcoin as an asset class, as well as increase its liquidity and price discovery.

Trading in Bitcoin Options listed on Deribit

If you are looking for a way to profit from the volatility of the cryptocurrency market, you might want to consider trading in bitcoin (BTC) options listed on the cryptocurrency exchange Deribit. Bitcoin options are contracts that give you the right, but not the obligation, to buy or sell bitcoin at a specified price and time. By trading in options, you can hedge your exposure to price movements, speculate on future trends, or generate income from your holdings.

Deribit is one of the leading platforms for trading in bitcoin options, offering a variety of contracts with different strike prices and expiration dates. Deribit also has a high level of liquidity, security, and reliability, making it a preferred choice for many traders. According to data from Skew, Deribit accounts for more than 80% of the global bitcoin options market share and has seen a surge in trading volume and open interest in recent months.

One of the reasons why trading in bitcoin options on Deribit is more popular than ever is the introduction of the Deribit Perpetual Index (DPI), which tracks the price of bitcoin across multiple spot exchanges. The DPI allows traders to trade in options that are settled in cash, rather than in physical bitcoin. This means that traders do not have to worry about storing or transferring their bitcoin, and can avoid the risks of hacking, theft, or loss. The DPI also enables traders to use leverage, which can amplify their profits or losses.

Another reason why trading in bitcoin options on Deribit is more popular than ever is the innovation and diversity of the products offered by the platform. Deribit constantly adds new features and functionalities to its platform, such as the ability to trade in European-style options, which can only be exercised at expiration, or American-style options, which can be exercised at any time before expiration. Deribit also offers exotic options, such as binary options, which pay out a fixed amount if a certain condition is met, or barrier options, which are activated or deactivated when the price reaches a certain level.

Trading in bitcoin options on Deribit is not without risks, however. Options are complex and sophisticated instruments that require a high level of knowledge and experience to trade effectively. Options traders also have to pay attention to various factors that affect the price of the contracts, such as volatility, time decay, and implied interest rate. Moreover, trading in options involves fees and commissions that can eat into your profits.

If you are interested in trading in bitcoin options on Deribit, you should do your own research and due diligence before entering any position. You should also be aware of the rules and regulations of your jurisdiction regarding cryptocurrency trading and taxation. Trading in bitcoin options on Deribit can be a rewarding and exciting activity, but it is not for everyone. You should only trade with money that you can afford to lose.

JPMorgan tests tokenized assets with Avalanche blockchain as BlackRock submits S-1 Application

JPMorgan, one of the largest banks in the world, has announced that it is testing tokenized portfolios on the Avalanche blockchain platform. The bank said that it is exploring the potential of using blockchain technology to create and manage portfolios of digital assets, such as stocks, bonds, commodities, and cryptocurrencies.

The bank is using its own proprietary platform, called JPM Coin, to issue and redeem tokens that represent the underlying assets. The tokens are then transferred and settled on the Avalanche network, which claims to offer high scalability, low latency, and low fees. The bank said that this approach could reduce operational costs, improve liquidity, and enhance transparency for both the bank and its clients.

The bank also said that it is working with several partners, including ConsenSys, Circle, and Paxos, to provide custody, compliance, and settlement services for the tokenized portfolios. The bank said that it is aiming to launch a pilot program with selected clients in the first quarter of 2024.

The bank’s move is part of its broader strategy to embrace blockchain technology and digital assets. The bank has been investing in blockchain research and development since 2015, and has launched several initiatives, such as the Interbank Information Network (IIN), the Quorum enterprise blockchain platform, and the Onyx digital asset unit. The bank has also been offering exposure to cryptocurrencies through various products, such as Bitcoin futures, exchange-traded notes (ETNs), and investment funds.

BlackRock submits S-1 SEC filing for Spot Ether ETF.

BlackRock, the world’s largest asset manager, has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a spot ether exchange-traded fund (ETF).

According to the S-1 filing dated November 17, 2023, the BlackRock Ethereum Trust will invest primarily in ether, the native cryptocurrency of the Ethereum blockchain. The trust will also hold cash and cash equivalents to meet its expenses and other obligations.

The trust’s objective is to provide investors with exposure to the price performance of ether, as well as the opportunity to benefit from the interest income generated by lending out the trust’s ether holdings to third parties.

The trust will not seek to track the performance of any index or benchmark and will not use derivatives or other instruments to hedge its exposure to ether price fluctuations. The trust will also not engage in any active trading of ether, except for rebalancing or liquidating its portfolio as needed.

The trust will issue and redeem shares only in large blocks called “baskets”, which will consist of 50,000 shares each. The shares will trade on the NYSE Arca under the ticker symbol “BETH”. The trust’s sponsor is BlackRock Asset Management North America, Inc., and its custodian is Coinbase Custody Trust Company, LLC.

The filing comes amid growing investor demand for exposure to ether, which has surged more than 800% year-to-date and reached a new all-time high of over $8,000 on November 15, 2023. Ether is the second-largest cryptocurrency by market capitalization, after bitcoin, and powers a wide range of decentralized applications (dApps) and protocols on the Ethereum network.

BlackRock is not the first company to file for a spot ether ETF in the U.S. In October 2023, VanEck and ProShares also submitted their respective filings for similar products. However, none of these proposals have been approved by the SEC yet, as the regulator continues to express concerns about the potential risks and challenges of investing in crypto assets.

The SEC has so far only approved two bitcoin futures ETFs in the U.S., which launched in October 2023 and have attracted over $2 billion in assets under management. A spot bitcoin ETF, which would directly hold the underlying asset, remains elusive.

BlackRock did not disclose the expected launch date or fee structure of its proposed ether ETF in its filing. The filing also stated that the trust’s shares are not registered under the Securities Act of 1933 and are therefore subject to significant restrictions on resale and transferability.

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