The US Securities and Exchange Commission (SEC) has approved an exchange-traded fund (ETF) consisting of shares of companies that own Bitcoin (BTC).
The SEC has approved the application to launch Volt Equity’s Volt Bitcoin Revolution ETF, constituting securities from companies that own Bitcoin, Decrypt reports. Volt Equity’s portfolio includes stocks from companies like Tesla, Twitter, MicroStrategy, Square, and Coinbase. Crypto enthusiasts consider this the first step towards regulatory approval of exchange-traded funds associated with the first cryptocurrency.
Headed by San Francisco-based Volt Equity, the fund will offer retail investors access to BTC by investing in a portfolio of shares of “Bitcoin revolution companies” known for holding significant amounts of the first cryptocurrency.
In its initial filing back in June, Volt said that 25% of the future fund’s assets would be MicroStrategy shares. But now, Volt founder Ted Park says the percentage could be slightly lower when the fund, which will trade under the ticker BTCR, is listed on the New York Stock Exchange in the upcoming weeks.
Park also added that their ETF would include shares of approximately 30 stocks, including Tesla, Square, Coinbase, PayPal, Twitter and Marathon. According to the founder of Volt, the Volt Bitcoin Revolution ETF will be less volatile than assets on the crypto market, as the collapse of BTC will not be able to greatly affect the price of companies like Tesla or PayPal.
“A year ago, such an ETF would not have been possible,” said Park. “We hope this is a crack in the dam.”
In the meantime, other ETF applicants like crypto giant Grayscale continue to wait while SEC keeps on delaying their applications without explanation (and most of them have already spent years applying). Back in August, SEC Chair Gary Gensler said that they were ready to approve ETFs — but only those composed of Bitcoin futures, which Grayscale CEO Michael Sonnenshein compared to “favouring one child over another.”
The SEC has been known to deny Bitcoin ETF applications based solely on market manipulation concerns. Approving only Bitcoin futures ETFs would hardly do anything to alleviate such concerns since such contracts are price-tied to the underlying asset.
One possible explanation for Gensler’s statement that the SEC would prioritise approving a Bitcoin futures ETF over a spot market ETF is that the former is regulated under different laws offering extra levels of investor protection.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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