Bitcoin ETFs: which funds are in the running?

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Approval of the first Bitcoin exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC) should spell good news for other ETFs waiting in line.


ProShares ETF will, according to news reports, become active on Tuesday this week unless the SEC objects to the filing, which can happen right up until midnight tonight.


Although no similar product has been approved in the US yet, the securities regulator is considering applications from almost two dozen companies, including Galaxy Digital (TSX-V:GLXY), VanEck, Valkyrie Investments, and FirstTrust/SkyBridge.


In October there are three ETF applications that require SEC a decision – be that approval, rejection, or delay – based on the count of Bloomberg Intelligence. These are the ProShares Bitcoin Strategy ETF, Invesco (NYSE:IVZ) Bitcoin Strategy ETF, and Valkyrie Bitcoin Strategy ETF.


READ: ETFs: what are they, how to use them, risks, advantages, and leverage


A decision on VanEck’s ETF has been delayed to 14 November, while the Global X Bitcoin Trust is due 21 November, and word on the Valkyrie XBTO Bitcoin Futures Fund is now set for 8 December.


WisdomTree Bitcoin Trust’s decision is scheduled for 11 December and Kryptoin Bitcoin ETF’s decision is scheduled for 24 December.


Other bitcoin ETFs awaiting approval include Wise Origin Bitcoin Trust and Grayscale Bitcoin Trust.


Star stock picker Cathie Wood’s ARK Invest team has an ETF, called ARK 21Shares Bitcoin Futures Strategy, that has applied to trade on the CBOE BZX Exchange, an SEC filing has shown.


Why futures?


If the Proshares Bitcoin ETF gains SEC approval it is likely to be seen as a watershed moment for the sector and potentially open the floodgates for dozens of other crypto ETFs applications.


The ETFs proposed by ProShares and Invesco are based on futures contracts and were filed under mutual fund guidelines that SEC Chairman Gary Gensler thinks to offer investors significant protection.


The fact that futures are a regulated market is critical to understanding why Gensler is likely to allow a bitcoin futures ETF to begin trading, but not a pure-play bitcoin ETF.


“The smallest step the SEC can take right now is to launch a bitcoin futures market because it is a regulated market,” Bitwise Asset Management chief investment officer Matthew Hougan said.


But this is only likely to open further questions for the SEC.


As Grayscale Bitcoin Trust CEO Michael Sonnenshein said, “A futures is a derivative of the spot market, so if you are comfortable with futures, why wouldn’t you be comfortable with the spot market?”

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