Neuberger Berman, a New York-based asset management firm, has gotten approval from the US Securities and Exchange Commission to invest up to 5% of its assets in Bitcoin futures.
Neuberger can invest up to 5% of its $164 million Commodity Strategy Fund for Investment in Bitcoin products such as Bitcoin futures and Canadian Bitcoin exchange-traded funds.
According to its regulatory filing with the US Securities and Exchange Commission (SEC), Neuberger, which manages more than $402 billion in client assets as of March 31, 2021, stated that its application has been approved effective immediately, and will allow its Commodity Strategy Fund to invest the $8.2 million from its commodities fund in Bitcoin products, either directly or through a “wholly owned subsidiary.”
Neuberger’s futures will be traded on exchanges regulated by the Commodity Futures Trading Commission (CFTC), such as the Chicago Mercantile Exchange, in the United States (CME). However, due to a lack of Bitcoin-related ETFs in the United States, Neuberger has decided to trade on Canadian Bitcoin ETFs.
On August 11, Neuberger filed the initial application with the SEC requesting clearance to add Bitcoin and Ethereum derivatives to its fund’s investment options.
However, in an amended regulatory filing with the SEC on August 20, Neuberger claimed that its $164 million commodities mutual fund might invest up to 5% of its assets in Bitcoin investments to acquire indirect exposure to Bitcoin.
The later filing addendum noted that Neuberger had replaced the earlier one, and so Ethereum derivatives do not appear to be among the firm’s investment alternatives.
According to the source, Neuberger’s rationale for investing in cryptocurrency stems from the need to expand the fund’s usage as an inflation hedge. Furthermore, the US investment business believes that pricing movements could serve as another possible source of revenue.
Concerns About Ether ETF Withdrawals
Neuberger Berman is not the only firm that has lately withdrawn its Ethereum futures application.
Several investing businesses have recently withdrew their applications for Ethereum futures ETFs, which has caused alarm among cryptocurrency users.
Just two days after filing their applications with the SEC for approval of Ethereum futures ETFs, financial firms ProShares and VanEck withdrew them.
Eric Balchunas, senior ETF Analyst at Bloomberg, noted that the sudden withdrawals could indicate that the SEC spoke with both firms and advised them that they were unlikely to approve an ETF futures fund.
However, Balchunas added that as long as the industry sees the ejection of Ether EFTs, that is good news for Bitcoin ETFs. It might be interpreted as the SEC considering admitting Bitcoin ETFs for the first time soon.
Earlier this month, SEC Chairman Gary Gensler hinted that the regulator would be more amenable to ETFs based on futures rather than cryptocurrencies themselves. Such remarks encouraged a slew of corporations to apply for crypto futures ETFs, including Bitcoin futures ETFs and Ethereum futures ETFs.
