The movement towards bitcoin ETFs is gathering steam. 

The New York Stock Exchange filed with the SEC today to list two ETFs tracking bitcoin futures. The two ETFs - ProShares Bitcoin ETF and ProShares Short Bitcoin ETF - are offerings by ProShares, a leading provider of ETFs with more than $29 billion assets under management. The ProShares Bitcoin ETF is long on bitcoin futures contracts while the ProShares Bitcoin ETF is short on the same entity. (See also: Bitcoin ETF Race Gets Another Sprinter.)

Win Thin, global head of emerging strategy at Brown Brothers Harriman, custodian of funds for the ETFs, said the move represented further “mainstreaming” of bitcoins. “Hopefully, that what comes out of this move: more regulatory oversight,” he said. (See also: Bitcoin ETFs Are Next In Line After Futures.)       

The NYSE’s move follows that of the Chicago Board Options Exchange (CBOE) yesterday. The Chicago agency filed to offer bitcoin-related ETFs from GraniteShares, a new ETF company launched last year, on its CBOE BZX exchange.  

Even though it has risen by more than 1,800 percent this year, bitcoin has not attracted funds from institutional investors. They have largely stayed away to avoid exposure to its wild price swings. As an example, the cryptocurrency almost touched $20,000 over the weekend before shedding as much as $5,000 in the next couple of days. The introduction of futures contracts, and the corresponding increase in liquidity it promises, is expected to smooth out the volatility. Approximately 15 firms have reportedly filed applications with the SEC for bitcoin-related ETFs.

Former SEC Commissioner Dan Gallagher told Bloomberg that he did not expect the agency to approve the filings. “Truth be told, the substance of some of the concerns that the SEC had will remain,” he said. The SEC had previously expressed concern regarding the absence of agreements to avoid price-fixing between unregulated exchanges that are responsible for providing spot prices for futures contracts traded at CME and CBOE.

Bitcoin futures contracts have been trading on CBOE since December 6 and on CME since last Sunday. Trading volumes have been fairly low as compared to those at bitcoin exchanges. The CBOE contracts began trading at a premium to spot market prices but have bridged the gap in recent days. Bitcoin futures on CME touched a high of $20,650 before closing at $18,200 yesterday. The price of a single bitcoin at 20:23 UTC was $16,689.03.

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns 0.001 bitcoin.

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