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SEC and CFTC Caution Investors About Funds Trading in Bitcoin Futures – Regulation Bitcoin News

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have warned buyers of the dangers of investing in funds with publicity to bitcoin futures.

  • The SEC printed an investor alert on funds buying and selling in bitcoin futures Thursday. The alert comes from the SEC’s Office of Investor Education and Advocacy (OIEA) and the CFTC’s Office of Customer Education and Outreach (OCEO).
  • They identified that some funds could interact in the buying and selling of bitcoin futures contracts as a method to acquire publicity to bitcoin, emphasizing that the cryptocurrency “is a extremely speculative funding.” The doc cautions:

Investors ought to take into account the volatility of bitcoin and the bitcoin futures market, in addition to the shortage of regulation and potential for fraud or manipulation in the underlying bitcoin market.

  • They urge buyers desirous about investing in a fund that buys or sells bitcoin futures “to weigh fastidiously the potential dangers and advantages of the funding,” naming components, akin to their threat tolerance, the fund’s disclosure of its dangers, and potential lack of funding.
  • The alert additional warns {that a} rise in the value of bitcoin could not end result in a rise in the worth of the fund holding positions in bitcoin futures contracts, citing a number of causes. For instance, the funds could not have direct publicity to the contracts’ underlying belongings. In addition, bitcoin futures contract costs can fluctuate by supply months and differ from the BTC value itself. Futures contracts additionally expire periodically, ensuing in fluctuations of portfolio publicity as expiring futures positions are sometimes rolled into new contracts.
  • Meanwhile, the brand new chairman of the SEC, Gary Gensler, has been pushing for elevated oversight of the crypto area, notably crypto exchanges. The SEC has introduced 75 crypto-related enforcement actions on the business up to now. Gensler has known as on Congress to go a legislation to guard buyers.

What do you concentrate on the SEC and CFTC warning about funds investing in bitcoin futures? Let us know in the feedback part under.

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Bitcoin Caution CFTC Funds Futures Investors News Regulation SEC Trading


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