4 Bitcoin Futures-backed ETFs Filed Since SEC Chair Gary Gensler Signaled His Openness to Them
Grayscale’s global head of ETF reads Chair Gensler’s comments to be “very positive,” while ProShares’ head of investment strategy says, “the advantage of this approach is clear.”
Valkyrie Investments is the latest company to file with the US Securities and Exchange Commission (SEC) for a Bitcoin futures exchange-traded fund (ETF).
The crypto trading firm that raised $10 million in a Series A capital round to drive its ETF plans is also awaiting SEC’s decision on its physically-backed Bitcoin ETF.
The Fund, Valkyrie Bitcoin Strategy ETF, however, won’t be investing directly in Bitcoin. Instead, it will seek to purchase Bitcoin futures contracts so that the total value of the crypto asset underlying the futures contracts in it is as close as possible “to 100%” of the fund's net assets, according to the proposal.
This proposal comes in the wake of SEC Chair Gary Gensler’s comments at the Aspen Security Forum, where he signaled that he is open to an ETF that Bitcoin futures offered by CME backs.
“I anticipate that there will be filings with regard to exchange-traded funds (ETFs) under the Investment Company Act (’40 Act). When combined with the other federal securities laws, the ’40 Act provides significant investor protections. 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.”
Ever since Gensler’s comments, four such filings have been made by VanEck, Proshares, Invesco, and now Valkyrie that aims to provide exposure to Bitcoin Futures, Canadian ETFs, exchange-traded products (ETPs) invested in it, and Trusts like Grayscale Bitcoin Trust (GBTC).
“We read Chair Gensler’s comments to be very positive … because the story is no longer if there’s going to be a bitcoin ETF but when there’s going to be a bitcoin ETF,” said David LaValle, Grayscale’s global head of ETF in an interview with CNBC this week. Grayscale itself is “100% committed” to convert its GBTC into an ETF.
Meanwhile, ProShares’ head of investment strategy, Simeon Hyman, said, “the advantage of this approach is clear,” in terms of the futures market is regulated, CME and CFTC acting as the clearinghouse, people already having the understanding of a mutual fund, and the ability to get in and out every day at net asset value (NAV). Hyman said in a separate interview,
- “I want exposure to the changing price of bitcoin. I don't need to access bitcoin in the same way as someone who's using it for one of its core attributes.”
- “The futures approach in a mutual fund will absolutely have an important audience out there.”
There are about twenty crypto-specific filings made this year in the US, with the majority of them to hold BTC, while some include Ether and a basket of cryptos.