Despite the challenges faced overtime, CBOE Global Markets is still the favorite to become the first company to get a Bitcoin ETF approval.

The CEO and president of the company Chris Concannon is still hopeful that the U.S Securities and Exchange Commission will approve his Bitcoin ETF. He, however, recognizes that the prospect still faces some challenges.

Bitcoin ETF still has challenges

Just last week, the commission postponed its decision for the SolidXPartners Inc. and VanEck Associates Corp.’s proposal to list Bitcoin ETF on CBOE. This move shows that SEC is still wary of a Bitcoin ETF at this point.

A few weeks before that, the commission has rejected an ETF proposal from Cameron and Tyler Winklevoss, with SolidX Partners Inc., saw its earlier proposal rejected.

Interestingly, one of the SEC’s commissioners wrote an open letter stating that the Winklevoss Bitcoin ETF was wrongfully rejected.

The careful vigilance shows that the commission is still concerned about price manipulation in a market that is still unregulated to a large extent.

CBOE and Chicago exchange CME Group were allowed to start offering Bitcoin futures contracts last year. This was the first move that shows Bitcoin is going into mainstream finance.

The Bitcoin futures are traded in a much more regulated market and could provide the foundation for an ETF to be offered instead of Bitcoin itself.

CBOE talks about SEC’s concerns

According to the ETF filing by SEC, it will only invest in Bitcoin to benefit its investors. It will offer over-the-counter trades among accredited market investors while properly ensuring the funds that are invested in the cryptocurrency.

One of SEC’s concerns is the lack of sufficient insurance for crypto investors.

According to Concannon, the futures provided a market that is more mature and healthier. However, a futures-based ETF raises the question of what is the correct liquidity level considering the fact that the product hasn’t been tested yet.

At the moment, the trading volumes of Bitcoin futures is nowhere near the levels of some commodities like oil and gold. However, waiting for an increased volume before introducing ETF poses a problem.

Even though the ETF would increase the volume of futures trading, SEC wants sufficient liquidity in the underlying futures before it can approve the ETF.

The market is seeing other players come in. The New York Stock Exchange has concluded plans to offer a physically-settled cryptocurrency futures contract before the end of the year.

First ETF to be approved will lead the market

Concannon believes that getting the first Bitcoin ETF approved would be very huge for the market. Once that happens, the inflow of capital into the market will continue, depending on the precedent set by other ETFs.

It is still left to be seen if what he hopes for actually happens. Most people were expecting the cryptocurrency market to record even higher gains following the entry of futures contracts towards the end of last year.

The next step is for a Bitcoin ETF approval and for the Wall Street community to start welcoming digital assets. It is yet to be seen if those two will lead to the much-anticipated market recovery and price boom.

Concannon had earlier stated that outpaced trading volume, pointing out that the size of the crypto market is still a fifth the market cap of Apple.