Cboe is on the brink of a groundbreaking move: the creation of a multi-share class fund marrying exchange-traded funds (ETFs) and mutual funds. Should the SEC greenlight this proposal, experts anticipate a seismic surge in both the number of ETFs and their assets.
The proposal lodged by Cboe Global Markets with the U.S. SEC heralds a new era in the crypto market. Currently, ETFs and mutual funds operate within distinct regulatory frameworks, but this innovative venture aims to blur those lines.
In the mutual fund realm, transactions occur at day’s end, pegged to the net asset value (NAV) determined post-market closure. In sharp contrast, ETFs trade continuously on exchanges akin to stocks, rendering their prices subject to real-time fluctuations.
CBOE’s 19b-4 filing seeks to usher in an era of multi-share class fund structures, potentially bridging the gap between Mutual Funds and ETFs — a move underscored by Bloomberg ETF analyst Eric Balchunas. The clock is now ticking for the SEC, which has 240 days to render a verdict on this transformative proposition.
This endeavor isn’t without precedent. Vanguard pioneered a distinctive ETF structure patented in 2001, enabling the creation of ETF share classes mirroring existing mutual funds. However, Vanguard’s patent expiration in May 2023 paved the way for others to follow suit.
Reuters notes that post-patent expiration, eight asset managers, including industry titans like Dimensional Fund Advisors, Morgan Stanley, and Fidelity, are vying for approval to adopt a similar share class structure for their ETFs. With heavyweights like T. Rowe Price and JPMorgan also expressing keen interest, a tidal wave of new ETFs fashioned on this model seems imminent.
In a conversation, Todd Sohn, an ETF analyst at Strategas LLC, underscored the potential ripple effect of SEC approval for Cboe’s recent filing, foreseeing a surge in both the number of ETFs and their assets. The allure of ETFs persists, with Morgan Stanley and UBS recently throwing their hats into the ring with Bitcoin ETF filings, as reported by CNF.
The advent of Bitcoin ETFs has emerged as a potent force influencing BTC price dynamics. Fluctuations in volume trigger corresponding movements in BTC prices, and the influx of more ETFs promises to expose traditional investors to digital assets, further stoking price volatility.
At present, BTC is trading at $69,443, registering a 1.5% change in the last 24 hours. Investors are eyeing the psychological barrier of $70,000, with bullish sentiment targeting the $75,000 all-time high achieved a few weeks ago.