The crypto trading company Valkyrie Investments filed a proposal with the US SEC for a Bitcoin Futures ETF
According to a draft prospectus submitted to the SEC dated August 11, “the 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 future contracts held by the fund is as close to 100% of the net assets of the Fund as possible”.
The fund will invest indirectly, via a wholly-owned subsidiary of the Fund organized under laws of the Cayman Islands, in standardized futures contracts on bitcoin. Such future contracts are only traded on commodity exchanges registered with the Commodity Future Trading Commission (the “CFTC”).
Currently, bitcoin futures contracts in which funds are only traded on or subject to rules of the Chicago Mercantile Exchange (the “CME”). The value of bitcoin Future is determined by reference to CME CF Bitcoin Reference Rate, which indicates bitcoin price. The Fund looks to invest in cash-settled bitcoin futures.
Valkyrie raised $10 million in a Series A capital round to drive its ETF ambitions. It filed a Bitcoin ETF prospectus this year and is awaiting an SEC decision on its application.
Recently, Investment firm VanEck also filed with the US SEC for a strategy ETF with exposure to bitcoin futures. It will also not invest directly in Bitcoin, instead will provide exposure through Bitcoin futures contracts and pooled investment vehicles.
