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

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

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The U.S. Securities and Trade Fee (SEC) and the Commodity Futures Buying and selling Fee (CFTC) have warned traders 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 Workplace of Investor Schooling and Advocacy (OIEA) and the CFTC’s Workplace of Buyer Schooling and Outreach (OCEO).
  • They identified that some funds might have interaction within the buying and selling of bitcoin futures contracts as a approach to acquire publicity to bitcoin, emphasizing that the cryptocurrency “is a extremely speculative funding.” The doc cautions:

Traders ought to think about the volatility of bitcoin and the bitcoin futures market, in addition to the dearth of regulation and potential for fraud or manipulation within the underlying bitcoin market.

  • They urge traders fascinated by investing in a fund that buys or sells bitcoin futures “to weigh rigorously the potential dangers and advantages of the funding,” naming components, reminiscent of their threat tolerance, the fund’s disclosure of its dangers, and potential lack of funding.

  • The alert additional warns {that a} rise within the value of bitcoin might not lead to a rise within the worth of the fund holding positions in bitcoin futures contracts, citing a number of causes. For instance, the funds might not have direct publicity to the contracts’ underlying property. As well as, bitcoin futures contract costs can range by supply months and differ from the BTC value itself. Futures contracts additionally expire periodically, leading to fluctuations of portfolio publicity as expiring futures positions are usually rolled into new contracts.
  • In the meantime, the brand new chairman of the SEC, Gary Gensler, has been pushing for elevated oversight of the crypto house, notably crypto exchanges. The SEC has brought 75 crypto-related enforcement actions on the business to this point. Gensler has known as on Congress to cross a legislation to protect investors.

What do you concentrate on the SEC and CFTC warning about funds investing in bitcoin futures? Tell us within the feedback part beneath.

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