Valkyrie Looks To Gain SEC Approval For Bitcoin ETF
Dallas-based digital assets firm Valkyrie is getting set to launch its long-anticipated Bitcoin ETF after many trials, according to a New York Stock Exchange (NYSE) filing for the investment firm.
Valkyrie Files Again For Bitcoin ETF
The filing was made late on Friday following a growing wave of applications the US Securities and Exchange Commission (SEC) has received in the past days.
The regulatory agency would need to acknowledge the filing before a 45-day review window is opened. During this period, the SEC would either approve or disapprove or possibly extend the review period.
The financial regulator has not been receptive to Bitcoin ETF applications since the first series of filings a couple of years ago.
But things seem to be looking up for the crypto community given the recent appointment of Gary Gensler as the SEC Chair. Gensler is a pro-crypto official who formerly served as the Commodity Futures Trading Commission and lectured extensively on blockchain and cryptocurrencies in MIT in the past year.
Speaking on their recent attempt, Valkyrie’s Chief Investment Officer Steven McClurg said that they have been planning on this move for five years.
According to McClurg, it has only been recently that there has been a ray of hope that the SEC would finally approve a Bitcoin ETF. This belief saw them commence filing to the SEC in August 2020.
Bitcoin ETF Just A Matter Of Time
But it has not been entirely smooth sailing for hedge funds and institutional investors looking to put their money to work on crypto.
The SEC is known for refusing to approve Bitcoin ETF filings, citing market manipulation and low liquidity as primary concerns.
In 2020, the SEC received close to ten different filings from investment firms seeking to add the volatile asset class to their offerings. The SEC’s continued refusal is summed up in a staff letter published by the agency by the former director of the SEC’s division of investment management Dalia Blass.
In the January letter, Blass cited concerns the agency is having concerning cryptocurrencies. According to her, the agency is focusing on five key areas, namely valuation, liquidity, custody, arbitrage, and potential manipulation. She also said the SEC would like to know how a crypto-focused ETF can be fairly priced given the significant price swings cryptocurrencies undergo.
In the aspect of liquidity, she asked how retail investors would redeem crypto gains regularly.
“Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products, and we have asked sponsors that have registration statements filed for such products to withdraw them,” the letter noted.
The SEC has used these comments to rebuff advances from interested parties.
But things seem to be changing since the crypto industry hit a $2 trillion market valuation in a little under 12 years. According to reports, the SEC recently announced that it was presently reviewing VanEck’s Bitcoin ETF filing. If this is approved, VanEck would be the first Bitcoin ETF in the US.