The fourth company is already applying for an ETF linked to BTC futures!
2 min readValkyrie Digital Assets has recently added to the list of companies that have decided to ask the US Securities and Exchange Commission (SEC) for a kind of “hybrid” type of BTC ETF linked to futures contracts.
We informed you that the BTC Futures ETF was requested by VanEck, which justified the move by saying that SEC chief Gary Gensler had clearly shown more affection last week by approving BTC Futures ETFs than traditional spot BTC ETFs.
While the spot BTC ETF is tied directly to the underlying BTC, which is traded on spot exchanges around the world, the BTC futures ETF is tied only to BTC futures contracts (this is an indirect mode of exposure to the price of BTC). This is also true of the latest applications for this type of BTC ETF, as Valkyrie has already announced that this ETF would be tied to BTC futures traded on the Chicago CME.
This is the 4th BTC futures ETF filed under the crucial (for Gensler) 1940 Act, joins Proshares, VanEck and Invesco. It’s poss these are approved as early as Nov this year but I’ve had football pulled away too many times to say it’s definite.
– Eric Balchunas (@EricBalchunas) August 11, 2021
According to Gensler, such an ETF is easier to control for the SEC, because the commission has direct supervision over the US exchange CME, where BTC futures contracts are traded. In the case of the traditional BTC ETF, this would not be the case, as the price of BTC is largely influenced by trades on foreign exchanges over which the SEC has no control. However, critics point out that such an ETF is less attractive to investors and involves higher costs for both the issuer and investors.
The SEC is already registering four applications for ETF linked to BTC futures
In addition to the aforementioned VanEck and most recently Valkyrie Digital Assets, Invesco and ProShares have applied to the SEC for approval of the BTC Futures ETF. The SEC currently has four applications for BTC futures ETFs and up to fourteen applications for more traditional “classic” BTC ETFs. However, the probability of approving a BTC futures ETF is greater than that of a more desirable spot BTC ETF.
Bloomberg analyst Eric Balchunas believes that based on Gensler’s statements, the first BTC futures ETF could theoretically be approved as early as November this year.
We add that the companies VanEck and Valkyrie have also submitted applications for the traditional spot BTC ETF. However, both companies have indicated that they are more likely to approve BTC futures ETFs. However, they also know very well that this type of BTC ETF is not exactly what the market itself demands.
