The centralized cryptocurrency exchange and lending platform BlockFi is next to deposit a Bitcoin ETF with the SEC. However, this ETF is intended to be backed by strong holdings of Bitcoin, rather than futures.
BlockFi NB Bitcoin ETF
According to company documents filed earlier today, the “BlockFi NB Bitcoin ETF” (ticker: BBBB) will issue shares that reflect the performance of Bitcoin held by the trust. He will order a not yet appointed custodian to buy or sell bitcoin on his behalf, in order to pay expenses or redeem shares. Each share will be valued daily based on Coin Metrics’ real-time benchmark rate on the current value of Bitcoin.
This contrasts with Bitcoin ETFs that have been approved in the United States so far. The ProShares and Valkyries Bitcoin ETFs are backed by futures contracts, on which they have a monthly holding limit. Based on its opening success, the ProShares ETF approached this limit within days of launch.
So far, all attempts to create an ETF backed by physical Bitcoin have been denied. SEC Chairman Gary Gensler has repeatedly favored futures ETFs because of their regulatory protections. However, the success of the first Bitcoin futures ETFs last month could inspire confidence in the SEC to take the next step.
BlockFi isn’t the only one trying, either. VanEck has applied for a similar product and Grayscale is looking to turn its massive Bitcoin fund into a publicly traded ETF. According to Bloomberg analyst James Seyfart, the SEC decision on Vaneck’s Bitcoin spot fund is due November 14.
If the SEC continues to hesitate, its international counterparts are much more welcoming. Australian regulators last month issued guidance on Bitcoin and Ethereum ETPs, signaling the openness to the product. Meanwhile, Canada’s neighbors to the United States were the first country to approve a Bitcoin ETF – and are now home to several.
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