Newly Proposed ETF Will Sneak Bitcoin

Wilfred Michael 

Wilfred Michael

Reporter

12 February 2019,
07:00
Newly Proposed ETF Will Sneak Bitcoin

Since it has taken a long time to get the U.S SEC to approve an Exchange Traded Fund (ETF) tracking Bitcoin, San Diego-based asset management firm, Reality Shares, claims to have found an alternate route.

On February 11, the firm filed a prospectus with the SEC to list an Exchange Traded Fund (ETF) that tracks “high-quality, short-term sovereign debt instruments” denominated in several fiat currencies such as Dollar, Euro, Yen, British Pounds, and Swiss Franc.

In addition to these debt instruments in sovereign currencies, the filing adds that the fund will “include virtual currencies, that have been widely adopted for use” namely, Bitcoin. To this end, 15% of the fund’s assets will allow investors to get exposure to the popular cryptocurrency through the Futures market.

In simpler terms, that would mean that 15% of the funds will be allocated to speculating Bitcoin prices within a particular period, with the ultimate hope of making a profit for the investment basket.

The filing also says that the fund will upon approval invest in Bitcoin Futures contract offered by Cboe Global Markets and CME Group while leaving the door open to investing with other Bitcoin Futures market place in the future.

Like the pending Bitwise ETF application, the fund proposed by Reality Shares will be listed with NYSE Arca, a division of the New York Stock Exchange.

Reality Shares CEO, Eric Evin expressed optimism that the SEC would be more open to approving their ETF’s exposure to Bitcoin, reportedly telling the Block,

“The SEC doesn’t want to approve a full-blown crypto ETF, but this limits exposure to 15%.”

Right now, only time will tell the U.S SEC’s verdict about the newly proposed ETF. Meanwhile, the regulators still have another Bitcoin ETF application to review; the one resubmitted earlier this month by from the Chicago Board Options Exchange (CBOE).

With SEC Commissioner Robert J Jackson Jr suggesting earlier this week that the agency will likely approve an ETF soon, chances are on the high that the Reality Shares proposal may get a green light.

 

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