ETFs are securities that track a basket of assets that are proportionately included in the fund’s units. They are considered by some to be a potential Holy Grail in terms of mass introduction of cryptocurrencies as a regulated and passive investment vehicle.
New ETF proposal
The proposed fund, which is to be listed on the NYSE Arca, is designed to provide access to global currency investments, both in Fiat and in virtual currencies. Which are spread around the world. For example, as a store of value, international money transfer, foreign exchange trading, etc.
The notification states that the value of the CFE and CME BTC futures positions will therefore be based on the respective future cash settlement value as published at the close of the trading day. It also suggests that the fund could evolve to invest in BTC futures that will be traded on other exchanges in the future. However, it is emphasized that the fund will not invest directly in Bitcoin.
The application states further,”The fund could gain access to Bitcoin futures generally through its interest in the subsidiary that invests in Bitcoin futures. And to the extent that the fund invests directly in such instruments. It will seek to derive its income from these instruments to a maximum of 10 percent of its gross income to be compliant with certain applicable income tests in order for the fund to qualify as a regulated investment company.”
In addition to Bitcoin futures, the proposed fund will also make larger investments in more traditional high quality, short term government debt. Which are admitted to trading on US exchanges and denominated in US dollars, Euro, British pound sterling, Japanese yen and Swiss francs.
As previously reported, another Bitcoin ETF of the investment firm VanEck and the financial services firm SolidX, which is to be listed on the BZX Equity Exchange of the CBOE, has been re-registered with the SEC.
Several players, such as the Winklevoss twins, have either failed or are waiting for SEC approval for their BTC ETFs. Crypto entrepreneur and CNBC analyst Brian Kelly recently claimed there was no chance for a crypto ETF to get the green light from regulators in 2019.