Several institutions are once again lining up to offer a cryptocurrency ETF, but will the SEC overcome its historical reluctance?
In a move that may give seasoned investors flashbacks to 2018, Valkyrie Digital Assets is the latest asset management firm to file an SEC registration to create a Bitcoin exchange-traded fund (ETF), a bid that joins an overpopulated field of would-be fund managers looking to take advantage of renewed retail interest in cryptocurrencies.
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Filed on Friday, the Texas-based investment fund family Bitcoin Circuit proposed listing the Valkyrie Bitcoin Trust on the New York Stock Exchange. The application did not include a possible stock token.
However, if history has taught us anything, it is that the chances of the filing leading to an ETF are slim. During the last Bitcoin bull run, multiple companies attempted to step up to the plate, with at least nine entities filing proposals for a Bitcoin ETF with the SEC, including exchange-traded fund giants VanEck and Direxion, as well as Gemini, the cryptocurrency services firm founded by the Winklevoss twins.
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In a previous interview with Cointelegraph, Kryptoin CEO Donnie Kim, whose firm filed for a BTC ETF in October 2019, said the SEC has long been hesitant to approve such proposals.
„Right now, the commission is listening and learning about this new asset class and is in a holding pattern, partly to understand the implications of existing products in the market and partly to look for new directions in the current policy landscape,“ Kim said.
Exchange-traded products abound, but cryptocurrencies still await an ETF
Despite the commission’s historical reluctance, as retail interest in cryptocurrencies grows, fund managers are once again clamouring to be the first to offer a BTC ETF.
On Thursday 21 January, gold ETF giant VanEck (which was the first firm to file a BTC ETF) filed an application to create a digital asset ETF, which would track the performance of the global Digital Assets Equity Index designed for cryptocurrency services companies.
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While US Bitcoin ETFs have been hard to come by, other exchange-traded products are flourishing. Options for traders include a Swiss Bitcoin ETP, a range of Grayscale products that could expand to include Chainlink in the coming months, and an Ethereum ETF in Canada that proved so popular that trading had to be halted at launch.