Earlier this summer, the Winklevoss brothers' second attempt at launching a bitcoin-linked exchange-traded fund (ETF) fell apart when the U.S. Securities and Exchange Commission (SEC) rejected it.

This second application was a revised and updated version of the first, which was turned down in March 2017. With the SEC's decision, many in the cryptocurrency space lamented what they saw as the failure of one of the best-positioned projects to open up the doors to a bitcoin ETF product. The SEC determined, however, that the space is simply too volatile and subject to manipulation in order to permit a product like this at this time. Nonetheless, a report by Bitcoinist suggests several reasons why proponents of bitcoin ETFs should remain optimistic that these vehicles may reach investors sooner rather than later.

CBOE Proposal

Weeks ago, the Chicago Board Options Exchange (CBOE) filed a proposed rule change in order to list and trade shares of its so-called Bitcoin Trust, the Van Eyck Investment and SolidX's Bitcoin ETF. In the lead-up to the tentative decision, due Aug. 10, CBOE and Van Eyck representatives have launched a heavy-firepower campaign in support of the project. It may be paying off: A recent report by Bitcoin Exchange Guide suggests that a credible source has suggested that there is "near certainty" that the CBOE project will be approved.

Custodial Services

As bitcoin and the broader cryptocurrency space have grown, more and more custodial services have become available. Coinbase announced plans earlier this summer to offer one such service, as did the Swiss Stock Exchange. Custodial services could be key to courting institutional investors, thereby raising the profile of cryptocurrencies and expanding the investor base beyond HODLers.

Continuing Clarification on Regulatory Status

There are, of course, still many regulatory questions to be answered when it comes to bitcoin. However, the government's position on cryptocurrency has become dramatically more clear in the last year, and signs point to continued clarification going forward. This, in turn, could help to alleviate the SEC's concerns about price manipulation and volatility. In the process, bitcoin could become a more viable connection for the ETF world as well.

Investing in cryptocurrencies and 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 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 bitcoin and ripple.