CBOE’s Ed Tilly Declares Need for BTC ETNs

| Publish date: 01/21/2019
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The Chief Executive Officer, President and Chairman of CBOE (Chicago Board Options Exchange) Ed Tilly declared that there was a need for BTC (Bitcoin) ETNs (Exchange Traded Notes) if traditional investors were to be attracted towards cryptocurrency industry.

Lack of Trading Products

According to the head of the United States’ largest options exchange, the growth of BTC is being crippled by a lack of trading products that are focused on attracting mom-and-pop investors.

Tilly also said that one of the reasons why the Bitcoin futures did not grow as well as hoped was there were no notes or trackers linked to the cryptocurrency that retail customers could use to trade. To open the door for Wall Street investors, both futures contracts as well as exchange traded notes were important entry points.

Changelly - Exchange cryptocurrency at the best rate

The CEO of CBOE explained that ETNs were much more accessible to regular investors vis-à-vis futures contracts because they had a lower barrier for entry.

He said that these notes were more attractive to retail investors when linked with futures. This way, institutions could push investment risks onto futures markets. Without one, the other was not really going to be as successful.

Barrier to BTC ETNs

Currently there are numerous Bitcoin exchange traded fund (ETF) applications on hold with regulators in the US. Tilly stated that one of the biggest reasons why the regulatory agencies refused to approve an exchange traded product for Bitcoin is because these government agencies are unable to protect investors from possible manipulations in a market that is outside their jurisdiction.

Tilly said that as soon as the issue of how BTC ETFs could be controlled, regulators would allow the existence of BTC ETNs too.

However, the chances of Bitcoin ETFs being approved – at least in 2019 – look bleak, according to Brian Kelly. Kelly, who is a cryptocurrency entrepreneur as well as regular CNBC contributor, feels that there is no way that Bitcoin ETFs would see the light of day this year.

Despite the pessimism, several crypto companies have applied for Bitcoin ETFs in the last few months. The most recent of them was by Bitwise Asset Management. This San Francisco-based crypto index fund provider has also applied to launch a Bitcoin exchange traded fund with the US Securities and Exchange Commission (SEC).

The question now remains, will the regulators allow for these new cryptocurrency-based products to flourish, or will they need to wait longer to make their debut?

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