ProShares has, in a recent statement, dismissed concerns surrounding the costs linked to derivatives trading that may lead to tracking inaccuracies and insisted the ProShares Bitcoin Strategy Fund (BITO) has faithfully mirrored Bitcoin’s spot price.

The United States Securities and Exchange Commission (SEC) is contemplating appealing a recent court decision – concerning Ripple Labs – that established XRP “is not necessarily a security on its face.”

While the unveiling of a highly anticipated bill on digital assets by U.S. legislators stoked hopes of a more favorable regulatory environment for the cryptocurrency sector, some industry experts have expressed concerns about the bill’s vague language.

Top stories in the Crypto Roundup today:

• ProShares Dismisses Concerns Over Bitcoin Futures ETF Performance
• SEC Mulls Over Challenging Court Ruling on XRP’s Status
• Crypto Bill Not Enough to Clarify Regulatory Landscape, Experts Say
• USDT Continues to Dominate Stablecoin Landscape

ProShares Defends Bitcoin Futures ETF Performance Against ‘Roll Cost’ Concerns

ProShares has, in a recent statement, dismissed concerns surrounding the costs linked to derivatives trading that may lead to tracking inaccuracies, and insisted the ProShares Bitcoin Strategy Fund (BITO) has faithfully mirrored Bitcoin’s spot price.

BITO is a Bitcoin futures ETF that was launched on the New York Stock Exchange back in October 2021, allowing investors to gain exposure to the cryptocurrency without directly owning it. It invests in cash-settled Bitcoin futures listed on the Chicago Mercantile Exchange (CME).

Market observers have long speculated BITO and other futures-based ETFs would significantly underperform BTC over the costs associated with rolling over, or selling expiring futures contracts and buying the next set.

Simeon Hyman, ProShares' Global Investment Strategist, said in a statement these concerns are misguided and that BITO has closely tracked Bitcoin since its launch. He added that from its inception through July 18, BITO has posted a return of -54.5%, compared to -51.5% for Bitcoin.

More than half of this slight difference is accounted for by BITO’s annual 95 basis points fee. According to Hyman, the fund's interest income from cash holdings offsets the roll costs, which are closely linked to U.S. interest rates.

BITO gains interest from its cash holdings, and this interest income is distributed as monthly dividends covering the roll decay in the fund. Since the beginning of the year, BITO has distributed dividends six times.

SEC Mulls Over Challenging Court Ruling on XRP’s Status

The United States Securities and Exchange Commission (SEC) is contemplating appealing a recent court decision – concerning Ripple Labs – that established that XRP “is not necessarily a security on its face.”

According to the SEC, this ruling contradicts “fundamental securities laws principles” such as the Howey test, which assesses whether a transaction can be categorized as an investment contract.

The SEC made these remarks in the context of another ongoing lawsuit against Terraform Labs and its founder, Do Kwon, accused of "orchestrating a multi-billion dollar crypto asset securities fraud." Terraform Labs referenced the Ripple Labs decision, which could potentially set a precedent, in their motion to dismiss the SEC's lawsuit.

In the SEC's response, the regulator cited several problems it sees with the recent court decision concerning XRP:

“Respectfully, those portions of Ripple were wrongly decided, and this Court should not follow them. SEC staff is considering the various available avenues for further review and intends to recommend that the SEC seek such review.”

Earlier, SEC Chair Gary Gensler expressed his dissatisfaction with the ruling that XRP is not a security when sold to retail investors. In an interview, Gensler said he was “disappointed” in the ruling on retail investors, but “please that the court addressed” the token as a security for institutional investors.

Crypto Bill Not Enough to Clarify Regulatory Landscape, Experts Say

While the unveiling of a highly anticipated bill on digital assets by U.S. legislators stoked hopes of a more favorable regulatory environment for the cryptocurrency sector, some industry experts have expressed concerns about the bill’s vague language.

One provision on the decentralized finance (DeFi) space, for example, is believed to not be enough to curb the SEC's aggressive regulatory stance on crypto. Billy Sebell, executive director of the XDC Foundation, voiced concerns about the potential of the bill to create more uncertainty.

Moreover, Gabriel Shapiro, general counsel for Delphi Labs, highlighted on Twitter that the bill still leaves many assets used in DeFi exposed to the risk of being classified as securities by the SEC.

The bill, called  "the Financial Innovation and Technology for the 21st Century Act," mandates the creation of clear definitions for "blockchain" and "digital asset" within existing financial law, and for the creation of rules specifically for crypto exchanges.

The lengthy 212-page bill includes fresh definitions of digital assets, exemptions, and protocols for registering cryptocurrency exchanges with both the SEC and the Commodities Futures Trading Commission (CFTC).

The bill sets a precedent by separating tokens from the manner in which they are sold, stating that a digital token sold as part of an investment contract does not instantly classify as a security. This modification seems to align with the recent ruling by a federal judge favoring Ripple Labs.

The proposed legislation has faced opposition from House Agriculture Committee Democrats who view it as too favorable towards the crypto industry.

USDT Continues to Dominate Stablecoin Landscape

As of mid-July, Tether’s USDT has solidified its dominance in the stablecoins market, reaching an unprecedented market capitalization of $83.8 billion, representing 65.9% of the sector's total market cap.

Simultaneously, the market values of both USD Coin (USDC) and Binance USD (BUSD) continued their downward trajectory, with USDC and BUSD experiencing declines of 3.01% and 4.57% respectively.

These drops saw the market capitalization of USDC drop to $26.9 billion, while BUSD’s is now at $3.96 billion. This marks the seventh straight month of declining market value for USDC, which is now at its lowest level since June of the previous year.

Dig deeper into the stablecoin sector through CCData’s latest Stablecoins & CBDCs report

State of the Crypto by Top Tier Exchange Volume

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