Bitcoin funds won’t happen soon, if ever

NEW YORK — It may be a while, if ever, before investors can buy an exchangetraded fund made up of bitcoin and other digital currencies.

Federal regulators have a long list of questions they want answered before they’ll approve a digital currency fund for investors. This week, the Securities and Exchange Commission sent a letter listing more than 30 of them to trade groups representing the investment industry.

Among the concerns in the letter: How would funds determine the value of their holdings when prices for digital currencies are so volatile? And, what steps would funds take to ensure they can cash out investors who want their money back each day? The SEC also expressed concern that digital currency markets have higher opportunities for fraud and manipulation than traditional securities markets.

Until the industry is able to answer these questions, “we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products, and we have asked sponsors that have registration statements filed for such products to withdraw them,” the SEC said.

An exchange-traded fund is similar to a traditional mutual fund, except that investors can buy and sell it throughout the trading day.