Valkyrie Files for ETF Linked to Bitcoin Mining on Nasdaq

In Brief:

• Valkyrie files for bitcoin mining exchange-traded fund (ETF).
• Valkyrie has applied to the US Securities and Exchange Commission for listing on the Nasdaq.
• The fund will have a 0.75% management fee and will invest in both domestic and international companies.

Valkyrie, a crypto asset management company, has applied for a new crypto-focused ETF to the US SEC that will focus on bitcoin mining. After Proshares issued the first bitcoin futures ETF with the symbol “BITO,” Valkyrie is recognised for establishing the second bitcoin futures ETF with the ticker “BTF.”

Valkyrie has applied to the US Securities and Exchange Commission to list a Bitcoin mining-related exchange-traded fund (ETF) on the Nasdaq Stock Market. Valkyrie would also invest up to 20% of the ETF’s net assets in companies that have “a significant portion of their net assets” in Bitcoin, according to the application.

The regulatory authority has until February 14 to make a decision on the fund, or the time can be stretched.

Valkyrie said it’s Bitcoin Miners ETF will not invest directly in Bitcoin (BTC), but at least 80% of its net assets will be used to invest in shares of companies that “derive at least 50% of their revenue or earnings” from BTC mining or provide mining-related hardware or software.No more than 5% can be invested in the debt instruments of BTC mining entities.

The risks associated with bitcoin investments are also explained in Valkyrie’s recent application on Form N-1A. The fund will be “indirectly exposed to the dangers of investing in bitcoin,” according to the application because bitcoin is a “new and highly speculative investment.”

Valkyrie’s miners ETF has a similar structure to VanEck’s digital asset mining ETF, which was approved by the SEC in December. The planned fund will have a 0.75 percent management fee and will invest in both domestic and international companies, including those from emerging market countries as defined by the FTSE Emerging Index.

The US SEC permitted investment instruments related to Bitcoin futures for the first time in 2021, although no Bitcoin spot exchange-traded fund has been approved in the United States. 

Despite the SEC’s persistent unwillingness to approve a spot Bitcoin ETF, the number of ETFs tracking crypto-related securities has increased to 15 in recent years. The SEC received a new blockchain and technology ETF application from BlackRock’s iShares earlier this week.

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