According to media reports, the launch of Hashdex Bitcoin Futures ETF(DEFI) on Thursday gave a boost to the prospect of an ETF or spot ETF that is physically-backed. This optimism can be attributed to the fact that DEFI was filed under The Securities Act of 1933. It is not like other futures-backed ETFs which were filed under The Investors Act of 1940.
DEFI was developed in collaboration with Teucrium which specializes on alternative investments.
Prospects for Bitcoin ETF
The 1933 Act would allow for a physical-backed Bitcoin ETF to be launched. This could open the door to a BTC spot ETF in the future. The coverage stated that analysts think the SEC will not allow spot ETFs until it has the regulatory oversight for crypto exchanges.
All futures-backed Bitcoin ETFs must be filed under the Investment Company Act of 1940. Gary Gensler, SEC chair, preferred the 1940 Act to approve derivatives-backed ETFs.
“The SEC seems to be open to the possibility that a spot bitcoin ETF could be approved. Currently, bitcoin futures ETFs can be authorized in the U.S. but the commission wants feedback to decide if funds such as the ARK21 Shares Bitcoin ETF should also be permitted,” Cinthia Murphy (Research Director at @ETFThinkTank) stated in a tweet.
SEC rejects proposals for spot ETFs
Grayscale Investments was denied a bid to convert its Bitcoin trust to a spot ETF by the SEC in June. This prompted the digital asset manager against the Commission to file a lawsuit.
The SEC stated that the proposal failed to meet criteria for preventing fraudulent or manipulative practices in spot ETF products. Grayscale’s ETF proposal is vulnerable to network hacking, wash trading, whale manipulation, network hackers, dissemination of misleading data, and manipulative activities via stablecoins.
Ark Investment Management applied for a spot Bitcoin ETF in May. This was after the ETF rejected its original proposal a month earlier.
Global investment manager VanEck also filed for a Bitcoin ETF in June, two months after its original proposal in November 2021 was rejected. After receiving no feedback or comments on VanEck’s application on July 13, the SEC extended its decision on VanEck’s proposal by two more months in August.
Spot Bitcoin ETFs outside the US
In August, Monochrome, an asset manager, was approved to launch a spot Bitcoin ETF (ETF) in Australia. Retail investors will have direct, insured exposure to the performance and future of Bitcoin, Ethereum and other digital assets through Monochrome Bitcoin ETF.
Three other spot crypto ETFs have been listed on Australian markets: ETFS 21Shares Bitcoin Exchange ETF, Cosmos Purpose Bitcoin Access, and ETFS21Shares Ethereum ETF.
Jacobi Asset Management published Europe’s first Bitcoin ETF (BCOIN), on Euronext Amsterdam, August.
Fidelity, one the world’s largest asset managers, launched a spot Bitcoin ETF in Canada in December 2021.
CryptoPotato’s first post, Hope for Spot Bitcoin ETF Gains Strength After DEFI Launch under the Securities Act appeared originally on CryptoPotato.
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