SEC approves first US Bitcoin equity ETF
“The SEC’s acknowledgment that existing frameworks can already be used to provide investors with regulated products to access the cryptocurrency growth story is a watershed moment that will open the door to further innovation in the space”, said Alpay Soytürk, Chief Regulatory Officer at Spectrum Markets.
The U.S. Securities and Exchange Commission (SEC) has approved a close enough Bitcoin exchange-traded fund (ETF), one designed to provide investors with exposure to publicly traded companies with exposure to bitcoin.
The Volt Crypto Industry Revolution and Tech ETF will track the performance of so-called “Bitcoin Industry Revolution Companies”, according to a prospectus filed Oct. 1.
The ETF tracks publicly listed companies that either hold a majority of their net assets in bitcoin, like MicroStrategy or that make a majority of their profits through mining or building mining equipment, like Marathon Digital Holdings.
At least 80% of the fund’s net assets will be invested in crypto stocks. The remaining 20% will be invested in more traditional stocks to offset the risk of the fund’s focused portfolio.
The ETF will not hold any cryptocurrencies directly, but will invest 80% of the fund’s net assets in crypto stocks while offsetting risk with the remaining 20% which will be invested in non-crypto stocks.
The SEC’s unclear path toward crypto has prompted speculation over whether the financial watchdog would ever approve a crypto ETF. The regulator did delay its decision on four bitcoin ETFs – GlobalX, WidsomTree, Kryptoin, and Valkyrie – to late November at the earliest.
The truth is that the Volt Crypto Industry Revolution and Tech ETF, which will trade under the ticker BTCR, does not track cryptocurrencies directly.
Alpay Soytürk, Chief Regulatory Officer at pan-European securitized derivatives trading venue Spectrum Markets, commented on the approval of the first US bitcoin-equity ETF.
“The SEC’s acknowledgment that existing frameworks can already be used to provide investors with regulated products to access the cryptocurrency growth story is a watershed moment that will open the door to further innovation in the space.
“Longer term, our view continues to be that current regulatory definitions need to be updated, and their scope expanded, to more comprehensively cover the complexities and idiosyncrasies of cryptocurrency, if it is to realize its potential as a more mainstream asset class”, Mr. Soytürk continued.
“But for now, this is a very positive step in the right direction, that sees regulators and the financial community come together to meet the ever-growing investor demand for secure and effective ways of investing in cryptocurrencies. Clear, consistent and effective regulation will be the pillars on which the next chapter of the cryptocurrency story are built.”