SEC approves Valkyrie’s Bitcoin futures ETF, the second this year

    09 May 2022

    The US Securities and Exchange Commission (SEC) has approved Valkyrie’s futures exchange-traded fund (ETF) application. This is the second futures ETF approved by the SEC this year after Teucrium. However, spot ETFs seem unlikely to happen soon without more regulation, recent developments suggest.

    According to the SEC document published on May 5, the application was filed under the Securities Exchange Act of 1934 using a 19b-4 form, the same law that spot Bitcoin (BTC) ETF prospects are relying on – albeit with little success thus far. Last month, the watchdog gave the green light to Teucrium’s Bitcoin futures ETF, which is the first such vehicle to be approved under the ’33 Act.

    First filed by Valkyrie in August 2021, the Valkyrie XBTO Bitcoin Futures Fund tracks BTC futures contracts. The agency, likewise, gave the go-ahead to Bitcoin futures ETFs from ProShares and VanEck but thus far denied all applications to establish a spot Bitcoin ETF. Several countries have Bitcoin ETFs, including Canada, Europe, and Latin America.

    The past year has seen many applications for ETFs, with several companies withdrawing their applications, such as Bitwise, which redirected attention to a spot fund instead. The funds have performed well thus far, although many people are hoping for greater success in the future with the introduction of a spot ETF.

    A recent Nasdaq poll found that a spot Bitcoin exchange-traded fund may lead to more financial advisers adopting cryptocurrencies.

    In a recent interview with Bitcoin proponent Anthony “Pomp” Pompliano, Sonnenshein said a spot Bitcoin ETF continues to be a matter of when, not a matter of if.

    “It is tough to put a timeframe on it. We will continue to advocate on behalf of our investors until that approval comes through. In the five-six years that we have been dealing with the SEC and regulators more generally, a lot has changed. Let’s remember that, they have a tough job. It is tough as a regulator to develop really good regulations when the industry and the asset class underneath it, continues to change.”

    According to Bloomberg analysts Eric Balchunas and James Seyffart in March, the SEC could accept a spot Bitcoin ETF as early as mid-2023, based on a proposed amendment to alter the definition of “exchange” within the regulator’s rules. According to the survey by Nasdaq, however, only 38% of financial advisers thought it probable that the SEC would eventually approve a spot cryptocurrency ETF, with 31% disagreeing.

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