Another firm just pulled its plans to launch bitcoin ETFs

Key Points
  • ProShares told the SEC it would like to pull its plan to launch four bitcoin ETFs.
  • The move comes a day after Rafferty Asset Management and Exchange Traded Concepts also withdrew applications, citing concerns from regulators.
  • A week ago Direxion Asset Management asked for permission to run ETFs that would offer multiples up or down of bitcoin futures moves.
Still a good chance for a bitcoin ETF this year: Inside ETFs CEO

Another firm has withdrawn plans to offer exchange-traded funds that would track the wildly popular cryptocurrency bitcoin.

In a letter to the Securities and Exchange Commission, ProShares said it would like to pull its application for four ETFs that would have been tied to bitcoin trading on the futures market.

No reason was given for the move, and a ProShares representative said the company would have no comment.

ProShares announced its intention in September to launch the bitcoin funds ahead of the Cboe and CME plans to trade futures for the digital currency on the open market. Industry watchers had figured that the futures trading would provide the key impetus for regulators to approve bitcoin ETFs, as it would set a concrete price level for valuing the funds.

But that has not proven to be the case, as regulators continue to push back on bitcoin ETF plans.

On Monday, trusts controlled by Rafferty Asset Management and Exchange Traded Concepts both said they were canceling three bitcoin-related funds. A filing for one of the funds indicated that SEC staff had "expressed concerns regarding the liquidity and valuation" of the futures contracts.

In its letter, ProShares merely said its move "is being made in response to a request from the Staff." The firm had proposed funds that would have allowed investors to bet both for and against bitcoin. ETFs trade like stocks and would give retail investors another avenue to get in on the burgeoning digital currency trade, in which bitcoin's price has exploded more than 1,500 percent higher over the past year.

ProShares is the 10th-largest provider of ETFs, with $29.5 billion under management in the $3.5 trillion industry.

The withdrawals came just days after Direxion Asset Management proposed a set of ETFs that would use leverage to allow investors to capture multiples of the bitcoin futures' performance. The funds would deliver 1, 1.25, 1.5 and 2 times the return, either higher or lower. One strategist called the proposal "insane," and another said it was "eye-watering."

Direxion has just shy of $13 billion worth of ETFs under management. The firm declined to comment on its plans.

WATCH: Brian Kelly launches suite of crypto ETFs

Bitcoin expert Brian Kelly launches a suite of crypto ETFs