(Adds details on fund proposals, analyst quote)
Dec 11 (Reuters) - Two fund managers are going back to U.S. securities regulators for permission to launch exchange-traded funds (ETFs) based on bitcoin, filings showed on Monday, after futures contracts began trading on Sunday in the high-flying digital currency.
REX Shares LLC and Van Eck Associates Corp are both proposing bitcoin funds that would use futures to gain access to the market instead of investing directly in them. Both companies declined to comment while the fund proposals are evaluated.
The U.S. Securities and Exchange Commission has denied or tabled all bitcoin ETF proposals received so far, but proponents think a successful debut of futures could revive the concept. ETFs could make it easier for investors to bet on bitcoin's price rising or falling because they can be bought and sold like stocks.
The front-month bitcoin contract, which expires in January, traded at $17,970 on Monday morning. Bitcoin is up more than 1,500 percent so far in 2017, having started the year at less than $1,000, and its gains in the past month have been rapid.
The asset trades largely on unregulated cryptocurrency exchanges, and demand for an exchange-listed product has been intense. Investors have turned to a small set of existing products, including the Bitcoin Investment Trust, an "over-the-counter" offering in the United States that sometimes sells for more double what the bitcoin it holds is worth.
CBOE Global Markets' bitcoin futures debut on Sunday could change that, with backers hoping the market will confer greater legitimacy on the volatile cryptocurrency and lead to its wider use. Other exchanges are due to list their own bitcoin futures.
The futures are based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, which is owned and operated by brothers Cameron and Tyler Winklevoss, who are virtual currency entrepreneurs.
The SEC blocked the brothers from launching their own ETF in March, citing the fact that the currency trades in unregulated markets. CBOE Holdings Inc's Bats exchange, which wanted to host that ETF, has appealed the ruling.
A number of rival applications have popped up in the months since, betting that a fund structured differently could win SEC approval. A number of the proposals rely on the futures, which do trade in regulated markets.
But the SEC told backers of those proposals they would not consider them until the futures started trading.
"Who knows what additional scrutiny the SEC might require, but I imagine after one settlement cycle it will be hard to deny," said ETF.com Chief Executive Officer Dave Nadig.
Van Eck is also teaming up with Nasdaq Inc to develop a new bitcoin futures contract, a source told Reuters last month. (Reporting by Trevor Hunnicutt in New York; Editing by Jeffrey Benkoe)