Valkyrie Digital Assets has become the latest American financial services company to file an application with the Securities and Exchange Commission (SEC), seeking approval for a Bitcoin exchange-traded fund (ETF) tied to BTC futures.
Wednesday’s filing came after the SEC Chair, Gary Gensler’s crucial speech in which he suggested that the securities markets regulators will be lenient towards approving the crypto ETFs exposed to the regulated futures contracts.
“When combined with the other federal securities laws, the ’40 Act provides significant investor protections,” Gensler then said last week. “Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures.”
Investing in Regulated BTC Contracts
According to the draft prospectus dated August 11, the asset manager will purchase Bitcoin futures contracts from exchanges registered with the US Commodity Futures Trading Commission via its Cayman Island-based subsidiary.
Additionally, it elaborated that the fund will initially invest exclusively into CME Group’s Bitcoin derivatives contracts.
“Under normal circumstances, the Fund will seek to purchase a number of bitcoin futures contracts so that the total notional value of the bitcoin underlying the futures contracts held by the Fund is as close to 100% of the net assets of the Fund as possible,” the filing added.
Valkyrie has already applied for approval for a spot Bitcoin ETF in April, but like all other peers, its application is still under the regulatory agency’s review.
With its latest filing, Valkyrie became the first company to seek permission to list a Bitcoin futures ETF after Gensler’s speech, but it can be anticipated that it will not be the last. Earlier,
ProShares and Invesco approached the SEC with a similar proposal of Bitcoin ETFs exposed to derivatives, both the applications are now under review.
Interestingly, VanEck was the first to push for such a futures-exposed BTC ETF in 2017, but its efforts failed then.
