(Adds First Trust filing, analyst quote)
Dec 11 (Reuters) - Fund managers are racing to launch exchange-traded funds (ETFs) based on bitcoin after futures contracts based on the high-flying digital currency began trading on Sunday.
Three more fund managers are proposing bitcoin funds that would use futures to gain access to the market instead of investing directly in them, filings showed on Monday.
REX Shares LLC, Van Eck Associates Corp and First Trust Advisors LP each filed proposals with the U.S. Securities and Exchange Commission since Friday, according to the documents.
REX and Van Eck declined to comment while the fund proposals are pending, and a First Trust spokesman did not respond to a request for comment. ProShare Capital Management LLC made a similar filing earlier this year.
"There's a real advantage, particularly in a niche ETF, to being the first one that gets to market, that gets the trading volume," said Dave Nadig, chief executive officer of ETF.com. The website is owned by CBOE Global Markets Inc, which listed the first bitcoin futures contracts and plans to list bitcoin ETFs if they are approved.
"We're in pretty untested territory here. There's hasn't been anything like bitcoin before so there hasn't been anything like bitcoin futures before."
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 $17,870 on Monday afternoon. 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.
Sunday's bitcoin futures debut 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's Bats exchange, which wanted to host that ETF, 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.
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 and Cynthia Osterman)