Asset managers appear hopeful the SEC is going to be more receptive to Bitcoin ETFs tied to futures contracts than those centered on the spot markets.
Alternative monetary services firm, Valkyrie being Digital Assets, has become the newest company to file for a Bitcoin exchange-traded fund (ETF) providing indirect exposure to BTC via cash-settled futures contracts.
According to a draft prospectus dated August 11, the Bitcoin futures contracts are going to be purchased via a Cayman Island-based subsidiary wholly in hand by the fund via exchanges registered with the U.S. Commodity Futures Trading Commission.
The prospectus adds that the fund can at first solely invest in Bitcoin contracts that are listed on the Chicago Mercantile Exchange (CME), with the ETF targeting a complete notional price of its underlying futures contracts “as getting ready to 100 percent of cyberspace assets of the fund as potential.”
Valkyrie additionally filed for a spot Bitcoin ETF below the Securities Act (1933) in Apr, but the new filing comes one week when SEC chairman, Gary Gensler, instructed he is also receptive approving exchange-traded merchandise exposed to regulated BTC futures contracts below the fund Act of 1940.
“When combined with the opposite federal securities laws, the ’40 Act provides vital capitalist protections,” aforementioned Gensler.
“Given these vital protections, I foresee the staff’s review of such filings, significantly if those are restricted to those CME-traded Bitcoin futures.”
Senior ETF analyst at Bloomberg, Eric Balchunas, noted that Valkyrie being is currently the fourth asset manager to submit filings for an ETF tied to Bitcoin futures below the 1940 Company Act since Gensler’s speech, following ProShares, Invesco, and VanEck.
Drawing on Gensler’s recent remarks, Balchunas tentatively expected the funds might receive a finding of fact from the SEC as early as Nov.