Valkyrie’s Bitcoin futures ETF has been approved by the US SEC, making it the fourth ETF to be active. The ETF was approved under the ’33 Act’ which controls the registration of securities with the SEC and the stock markets. However, the approval of another futures ETF again brings the question of when the SEC will approve a spot ETF. Neither there has been any signs of approval, nor has the SEC given any explicit instruction for the same.
The Valkyrie’s Bitcoin futures ETF
The SEC document published recently showed that the application for the futures ETF was filed under the 1934 act using a 19b-4 form. While this has worked for Bitcoin futures, for the spot ETF filed under the same act, it hasn’t. The approved ETF application of Valkyrie was first filed in 2021 but was rejected. At the time, the Securities and Exchange Commission only approved ProShares and VanEck.
Many companies that filed an application with the SEC also withdrew their applications and shifted their attention to a spot ETF. For example, Bitwise. However, this didn’t work out for any company till now. There have been rumors that the SEC might approve a spot ETF by mid-2023, but we have to wait for that.
What is a Bitcoin ETF, and what makes a spot one so important?
Bitcoin exchange-traded funds (ETFs) are pools of bitcoin-related assets provided by brokerages on standard exchanges for trading as ETFs. These ETFs aim to provide retail investors and investors who are hesitant to participate in cryptocurrencies with access to them without really owning them. There are also a lot of benefits to owning assets that trade freely on the stock exchanges. For example, tax breaks, better security, ease of investment, and many more.
While we have only seen future ETF approval till now, a spot one is essential. First of all, a spot ETF will trade based on the price of Bitcoin, unlike future ETFs, which still have a premium or discount compared to the market. More importantly, a spot ETF means that the company will buy actual Bitcoins and store them, which is going to reduce the supply and increase BTC’s price.
What are your thoughts as the SEC approves Valkyrie’s Bitcoin futures ETF? And do you think that the SEC will approve a spot BTC ETF in 2023 or 2023? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.