Valkyrie Applied to Open a Bitcoin ETF Linked to Futures Contracts
Alternative financial services firm Valkyrie Digital Assets sent an application to the US Securities and Exchange Commission (SEC) to create a Bitcoin Exchange Traded Fund (ETF) offering indirect access to Bitcoins through cash-settled futures contracts.
According to the documents, Bitcoin futures contracts will be acquired through a wholly-owned Cayman Islands subsidiary through exchanges registered with the US Commodity Futures Trading Commission. Initially, the fund will invest exclusively in Bitcoin contracts that are traded on the Chicago Mercantile Exchange (CME).
Additionally, in April 2021, Valkyrie applied for a spot Bitcoin ETF under the Securities Act (1933). But a week after the statement of SEC Chairman Gary Gensler, a new application was issued.
Gensler said he could approve an exchange-traded product linked to regulated BTC futures contracts under the Investment Companies Act of 1940.
The law, combined with other federal laws, provides significant investor protection, he said.
Erik Balchunas, a senior ETF analyst at Bloomberg, noted that Valkyrie was the fourth company to file for ETFs linked to Bitcoin futures under the Companies Act 1940, following ProShares, Invesco and VanEck. He hopes that the Commission will issue its verdict in November.