First ever US Bitcoin linked ETF to debut as long as there's no objections from the regulators
Shares of Valkyrie's Bitcoin ETF have been certified for listing on the Nasdaq, according to Eun Ah Choi, the Nasdaq's deputy general counsel and vice president of listing requirements.
The SEC has accepted the registration request for shares of Valkyrie's Bitcoin Strategy ETF for listing on the Nasdaq, according to a notification from October 15th. Valkyrie's Bitcoin ETF shares had been certified, according to a letter from the Nasdaq's deputy general counsel and vice president of listing requirements and were filed the same day.
Valkyrie stated in its SEC prospectus filed on August 11th, that its Bitcoin Strategy ETF will provide indirect exposure to the crypto asset through cash-settled futures contracts. Contracts will be purchased through a completely owned Cayman Islands subsidiary with exchanges licensed with the US Commodity Futures Trading Commission, or CFTC.
The SEC's official approval deadline for Valkyrie's ETF registration is October 25th, although it could be extended until December. The SEC is now reviewing applications from VanEck, ProShares, Invesco and many others for Bitcoin futures ETFs.
The ETF is based on the Chicago Mercantile Exchange's bitcoin futures. Many in the bitcoin community would prefer a pure-play ETF backed by physical bitcoin, so this is a disappointment. They argue that the high cost of rolling into futures contracts means that the cryptocurrency's spot price can't be accurately tracked and that the SEC should approve a pure-play bitcoin ETF.
Regardless, most bitcoin activists and the ETF community applaud it as a tiny but crucial step towards democratizing the crypto market. Because futures are a regulated market, SEC Chair Gary Gensler is more likely to authorize a bitcoin futures ETF to begin trading than a pure-play bitcoin ETF.
Gensler wishes to foster financial innovation such as cryptocurrency, yet he lacks regulatory power over key areas such as cryptocurrency exchanges. Congress will almost certainly need to step in and create a wide regulatory framework for the entire crypto world but the chances of that happening anytime soon are rather minimal.
However, the crypto industry is expanding at such a rapid pace that Gensler feels compelled to act. The SEC can only go so far in asserting regulatory authority without ruffling other agencies feathers.
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