2nd Bitcoin Mutual Fund Debuts

Cboe Vest launched its own Bitcoin mutual fund, a move that may provide a track record for regulators to scrutinize as they mull approval of a Bitcoin ETF.

The Cboe Vest Bitcoin Strategy Managed Volatility Fund (BTCVX) launched Monday, and tracks Bitcoin futures, with active managers moving assets between contracts and cash investments based on expected volatility.

BTCVX is the second mutual fund tracking Bitcoin in the U.S. The Bitcoin Strategy ProFund (BTCFX) was the first to market when it launched in late July.

Precursor To A Bitcoin ETF?

As of Monday, issuers have filed with the U.S. Securities and Exchange Commission to launch no fewer than 16 ETFs tracking the prime cryptocurrency. Those requests have been held up by questions as to whether investors can be protected against the volatility of digital assets, which derive their value almost solely through speculation.

Bitcoin in particular has been the poster child for hypervolatile assets, climbing from about $30,000 in late January to as much as $63,000 per token in mid-April before suffering a vicious drawdown through much of May.

BTCVX and BTCFX could end up as test cases ahead of approval of the first set of Bitcoin ETFs, because they provide exposure to the currency’s future prices, which are likely to be less volatile than a physically backed fund that’s subject to the whims of spot pricing.

SEC Chairman Gary Gensler said as much earlier in the month during a speech at the Aspen Security Forum, where he said an ETF that follows the agency’s rules on mutual fund construction could provide the necessary protections for investor use.

Contact Dan Mika at [email protected], and follow him on Twitter