- SEC approved a futures EFT application from Valkyrie.
- The application was filed under the ‘34 Act using a 19b-4 form.
- Spot bitcoin ETFs remain denied by SEC
- Regulators had earlier approved the first bitcoin futures ETF filed under the ’33 Act from fund group Teucrium
The United States Securities and Exchange Commission (known widely as SEC) has approved a futures exchange-traded fund (EFT) application from Valkyrie. The application was filed under the Securities Exchange Act of 1934 law, using a 19b-4 form.
This approval marks another ETF approved by the SEC, which has been accepting futures ETFs but so far, no spot ETFs. The Valkyrie Bitcoin Futures ETF was first filed in August last year and tracks bitcoin futures contracts. Regarding the potential of manipulation, the SEC noted that “it is unlikely that trading in the ETP would be the predominant influence on prices in that market.”
Regulators also approved the first bitcoin futures ETF filed under the ’33 Act, from fund group Teucrium, in April. In the approval letter, the SEC hinted that it would allow spot ETFs if it had more control over the crypto market and more supervision.Valkyrie Investments is very eager to bring to market its recently approved Bitcoin Futures Fund (XBTO), Chief Investment Officer Steven McClurg told newsmedia via email.
SEC noted that owing to the fear of inadequate investor protection in the market, they will not be opting for a spot ETF approval anytime soon. The SEC allowed ETFs that invest in bitcoin futures contracts to launch in October 2021. ProShares was first to market with such a product, and VanEck and Valkyrie soon followed with similar funds. Three of these products were filed under the Investment Company Act of 1940.
Grayscale Investments CEO Michael Sonnenshein said the ruling weakens the SEC’s argument to deny spot bitcoin ETFs, noting that the agency previously cited differences between the ‘40 Act and ‘33 Act as a reason for denial. Grayscale is currently seeking to convert its Bitcoin Trust (GBTC) to an ETF, and an SEC decision on the proposal is expected to happen in July.
Most crypto analysts believed that a spot bitcoin ETF launch or approval won’t happen until 2023 at the earliest.