<center>![Etf 1.jpg](https://gateway.ipfs.io/ipfs/QmdeLjSKLXd3Dg7kKaJrbkf3gLem3vqZe6mCg2ncbiFbm3)
</center>

The CBOE, or Chicago Board Options Exchange, has officially recommended to the SEC that they allow the launching of Bitcoin exchange-traded-funds, or ETFs. Naturally, this would lead to increased liquidity and investor interest in the cryptocurrency space and, aside from the potential of being used as a tool to manipulate the underlying (in this case, BTC), would likely be a bullish development for price both immediately and longer term.

An exchange traded fund is effectively a trust that holds an asset (referred to sometimes as "the underlying) in trust (for all intents and purposes, vaulted) so that speculators and investors can buy the fund itself directly, rather than hassle with ownership of the underlying. They tend to be used when they are barrier of some kind to easily holding title on an asset. For example, GLD is well known as a vehicle for speculating on the Gold price without having to install a vault and security guards. There are similar products for a variety of other "impractical" to hold items, such as oil, industrial metals, etc.

ETF have what is referred to as a NAV, or net asset value. For example, a Bitcoin ETF that owned 100 Bitcoin at $10000 per Bitcoin would have a NAV of $1 million. Usually, this means the market should put the total share value of that ETF around $1 million, though it could be a little less due to counterparty risk or a little more due to convenience.

<center>![Etf 2.jpg](https://gateway.ipfs.io/ipfs/QmQu4XCMq4G8Q4wUgUq9e4TeoSzZH1kp67K9dzPfe7mMvZ)
</center>

However, problems arise when the market begins to overvalue an ETF higher than their NAV, and indeed, this can become a powerful tool for manipulating prices. If you can sell an ETF product well above its NAV, you are effectively printing counterfeit "underlying", as far as the demand curve of the market is concerned. This greatly suppresses price. With gold, the effect may be 100:1 or more.

This could be a good way to bring more of the Bitcoin investment (and trading) back to the West, which as the following graphic illustrates, has not been the trend for the last several years. I just hope it doesn't turn into a vehicle for price suppression the likes of which Gold has soon for a decade or more.

<center>![Bitcoin Trading By Currency.png](https://steemitimages.com/DQmTorBzYaHPrm4r1h4cDQa2KDmmBFyABhQp9SzWQXFveGF/Bitcoin%20Trading%20By%20Currency.png)</center>

<center>*Let's also get rid of that slice of Tether. It appears to be going sour.*</center>

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*Sources: Google, Wikipedia, CBOE, CoinTelegraph, ZH, CBOE.com*
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