Valkyrie Files for Bitcoin Futures ETF Following Comments from Gary Gensler
Valkyrie Applies for Bitcoin Futures ETF After Gary Gensler Expressed Interest
In accordance with the draft prospectus drafted and submitted to the Securities and Exchange Commission on August 11:
"[t]he Fund will not directly invest in bitcoin. Under normal circumstances, the Fund will seek to purchase a number of bitcoin futures contracts so that the total notional value of the bitcoin underlying the futures contracts held by the Fund is as close to 100% of the net assets of the Fund as possible."
The filing further noted the direct investment of the fund and read:
"The Fund will invest indirectly, via a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the “Subsidiary”), in standardized, cash-settled futures contracts on bitcoin.”
Addressing the platforms utilized for the trading of these kinds of assets, the filing mentioned:
“Such futures contracts are traded on commodity exchanges registered with the Commodity Futures Trading Commission (the “CFTC”). Currently, bitcoin futures contracts in which the Fund will invest are only traded on, or subject to the rules of, the Chicago Mercantile Exchange (the “CME”). “
In addition to this, the filing laid an emphasis on the investment perspectives of the fund related to Bitcoin futures and said:
“The value of bitcoin futures is determined by reference to the CME CF Bitcoin Reference Rate, which provides an indication of the price of bitcoin across certain cash bitcoin exchanges. The Fund seeks to invest in cash-settled bitcoin futures."
Companies’ Earlier Attempts to Apply for Bitcoin ETF Prospects
Back in the month of April, Valkyrie submitted a Bitcoin ETF prospectus to SEC, and similar to all those firms who applied for the same at that time got rejected by the SEC.
The first attempt made by VanEck dates back to the year 2017, and it was reportedly unsuccessful.
Other companies such as Invesco, ProShares, and VanEck have submitted their filings to the SEC after the speech by Gary Gensler.
As for the speech by Gary on August 3, it said:
"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."