Battle for Spot Bitcoin ETF Heats Up as Valkyrie Funds Steps In

Updated: 22 June 2023

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The race for the first spot Bitcoin exchange-traded fund (ETF) continues to attract more players with Valkyrie Funds launching its bid on Wednesday. The crypto-focused asset management company has applied to operate the fund with the US Securities and Exchange Commission (SEC).

Valkyrie Funds expects to list the BTC shares on Nasdaq under the ticker BRRR if approved, as reported by The Block.

Anddd we have anotha one! Most interesting here with this updated Valkyrie Bitcoin Fund prospectus — they have changed their exchange to Nasdaq (same as BlackRock) anddd they gave us a ticker $BRRR. pic.twitter.com/3QxeFRfLPy

— James Seyffart (@JSeyff) June 21, 2023

Quest To Launch First Regulated Bitcoin Spot ETF Heats Up

Several market players are vying for the SEC’s approval of a spot Bitcoin ETF. The rush began after Blackrock, the world’s largest asset manager, submitted its filing on June 15. Wisdom Tree and Invesco jumped on the bandwagon by filing similar applications on June 20.

Despite the lawsuits against Binance and Coinbase, these investment firms believe it’s a perfect moment to apply for the industry’s most sought-after approval with the US regulator.

The wave of spot Bitcoin ETF filings also coincides with the launch of EDX Markets, a crypto exchange supported by Charles Schwab, Fidelity Digital Assets, and Citadel Securities.

The SEC has in the past rejected several spot BTC ETFs, citing the lack of a surveillance-sharing agreement with the markets trading the underlying assets, specifically the Chicago Board of Exchange, something the securities regulator insisted was a condition of any approvals.

However, in the latest applications, the interested firms have expressed a willingness to enter into a surveillance agreement with a US-based spot trading platform for Bitcoin. In addition, they demonstrated their commitment to monitor and prevent price distortions and manipulative activities, according to de-fi planet.com.

Nasdaq Content with Valkyrie Move

Nasdaq describes the move displayed by these firms as noble, as it’s a revelation that the firms embrace the industry’s demand for regulated investment products, and every stakeholder wants to capitalize on a ‘first-mover advantage.

When Valkyrie filed its spot BTC ETF application, the Bitcoin price leaped above $30,000 after dropping to just above $25,000 last week.

“The shares are designed to provide a cost-effective and convenient way to invest in Bitcoin. They(shares) represent units of fractional, undivided beneficial interest and ownership of the Trust, Valkyrie’s filing stated in part.

As firms like Valkyrie, Blackrock, Invesco, and Wisdom Tree enter the race for approval, they aim to provide investors with more accessible and regulated avenues to participate in the Bitcoin and crypto market.

Valkyrie already has a Bitcoin futures ETF product listed on Nasdaq, and it operates two Bitcoin funds: Bitcoin Strategy ETF (Futures Fund) and Bitcoin Miners ETF (Investment Fund in Miners).

What Is A Bitcoin ETF and Why Is it a Big Deal?

A Bitcoin spot ETF is an exchange-traded fund that directly holds Bitcoin as its underlying asset. It allows investors to buy and sell shares of the fund on a traditional exchange without having to deal with the complexities of actually owning, storing and securing bitcoin.

A Bitcoin spot ETF would also track the price of bitcoin more accurately than a Bitcoin futures ETF, which holds contracts that bet on the future price of bitcoin.

A spot Bitcoin ETF would also reduce the barriers to entry and the risks involved in investing in bitcoin.

Despite the many benefits likely to come with the coveted product, the U.S. Securities and Exchange Commission (SEC) is yet to approve any Bitcoin spot ETFs.