Gensler’s ‘simple’ ticket to a ‘victory’ may be a futures-based Bitcoin ETF.
The Securities and Exchange Commission of the United States just authorised Volt Crypto’s ETF, and crypto fans are ecstatic.
However, this is the closest approach to an ETF that has been approved by the Securities and Exchange Commission. And by doing so, the agency may have created more uncertainty among consumers than clarity.
Volt ETF, which was approved on October 5th, would not invest directly in Bitcoin. Instead, at least 80% of its net assets will be invested in “Bitcoin revolution companies,” options, and ETFs that have exposure to those companies.
The remainder will be invested in broad stock markets to reduce the portfolio’s risk. So, it’s not quite an ETF, but it’s close. We’ll gladly accept it.
Indeed, when the SEC delayed the approval of a Bitcoin ETF application earlier this month, analyst Eric Balchunas predicted this. Balchunas had remarked at the time,
“Yes, the SEC has kicked can on bitcoin ETF approval BUT that is for the physically-backed ones under ’33 Act. The futures ETFs filed under the ’40 Act (which Genz loves) are very much alive and likely on schedule (we think 75% chance approved in Oct). “
He also offered a list of the stocks he believes have the best odds, which included Proshares, Invesco, VanEck, Valkyrie, and Galaxy.
The analyst does not consider approvals in the near future, such as those granted to Volt, in his forecast. Many others, however, believe that the forecast was correct. Nonetheless, several people expressed a different point of view in the event that Balchunas was proven wrong.
Nate Geraci, President of the ETF Store, a financial advising business, wrote on Twitter:
“@EricBalchunas says 75% chance Bitcoin ETF approved in Oct.Time to get everyone on record. Yay or nay?I say yes, though if doesn’t happen we may be waiting til like 2025.”
SEC Chair Gary Gensler caused some confusion when he stated that while the Investment Company Act [’40 ACT] provides the necessary investor protection, he is awaiting the results of a staff examination of an ETF file.
“This is especially true if those are restricted to these CME-traded Bitcoin futures,” he added.
Following the release of these remarks by Gensler, the approval of Volt’s BTC ETF has been granted. It creates greater room for other exchange-traded funds (ETFs) to be approved as well.
Meanwhile, it has requested that two issuers remove their Ethereum Futures submissions, while Bitcoin-centric filings are still being considered.
Geraci went on to say,
“Given that ETF issuers have been tirelessly pursuing Bitcoin ETFs for over eight years now, it seems somewhat disingenuous for the SEC to encourage more filings at this point only to disapprove them. Approving Futures-based Bitcoin ETFs seems like an easy way for the SEC and Chair Gensler to get a ‘win’ in terms of appearing forward-thinking on crypto.”
