Valkyrie Digital Assets, a US crypto-focused investment firm, is making another attempt at bringing a bitcoin exchange-traded fund (ETF) through a modified prospectus filing.
Investments in Bitcoin-facing Companies
The N-1A filing named Valkyrie Innovative Balance Sheet ETF would enable investors to buy stocks from companies that own Bitcoin investments. The document was submitted to the US Securities and Exchange Commission (SEC) on Friday.
According to the document, the company will let investors invest principally in companies’ securities with some form of exposure to Bitcoin in their balance sheet.
This will see Bitcoin trading platforms, custodians, digital wallet providers, companies that aid crypto payments with BTC, and companies that create technology for Bitcoin adoption getting listed.
The ETF is also expected to invest up to 25% of its assets in companies within the information sector.
ETFs are the hottest topics in the financial markets today. ETFs offer effective metrics to predict the market’s price movements; investors also love them because they are not time-restricted, making them tradeable at any time of the day, unlike traditional common stocks.
In the past week, fellow investment firm JP Morgan Chase made a similar filing with the SEC, describing the offering as a “cryptocurrency exposure basket.” According to JP Morgan, investors will be able to buy structured notes whose value is attached to 11 stocks from companies holding Bitcoin or other cryptocurrencies.
The US investment manager said 68% of its crypto-asset initiative would comprise intelligence firm MicroStrategy, payments facilitator Square, crypto mining company RIOT blockchain, and gaming chipmaker NVIDIA. The company said it would not be listing electric car company Tesla Inc. even though they hold Bitcoin in their records because its stock price is too high.
According to a JP Morgan analyst, Tesla’s stocks are overvalued, which can adversely impact the markets. The analyst who wrote to Fortune, said investors should not stock-up on Tesla shares.
Not toeing the same path as JP Morgan, Valkyrie has remained mute on which companies will make it into its ETF offering if it is approved.
SEC Still Reluctant To Approve ETF
The SEC has seen filings for Bitcoin ETFs increasing by the daily. The regulatory agency, which has not approved any filing for an exchange-traded fund until date, has been called out by some who say the commission is indifferent to the surging crypto markets.
Recent filings by NYDIG, VanEck, and even an ETF filing by Valkyrie itself have gone unaddressed. The SEC has remained steadfast in its claims that a Bitcoin ETF could impact the market negatively, citing market manipulation as a major concern.
Industry experts have asked the SEC to provide regulatory clarity to the whole crypto ecosystem as their continued silence could see other countries win the crypto race.