Valkyrie Digital Assets becomes the latest company to file for a Bitcoin ETF and up to this date, the SEC has shafted plenty of applications but will something change now under Biden’s administration? Let’s find out in today’s crypto news.
Valkyrie submitted an application for an ETF a day ago as it is expected to bring new money into the crypto market and will also increase demand. The applications for BTC ETFs were unsuccessful so far but the new Biden administration could change this. Valkyrie Digital Assets is the crypto subsidiary of the investment company Valkyrie Investments as it filed an application for a BTC ETF with the US Securities and Exchange Commission. The application filed yesterday made it the second company to apply for an ETF after VanEck resubmitted the application last month.
The BTC ETF is a financial product that is listed on the stock market that tracks the underlying price of BTC. The advantage of the exchange-traded fund for investors would be that they invested in tax-sheltered accounts and are available for retail investors as well as the accredited investors and will handle the custody of BTC on behalf of the investors. It is also cheaper than the current BTC products like the Grayscale Bitcoin Trust.
Another advantage is that the crypto economy will bring in a lot of new money into the market and will drive up the demand and as well Bitcoin’s price. Valkyrie will trade on NYSE Arca and will provide investors with an efficient means to implement various investment strategies. Xapo will provide custody for BTC and all of the funds that will be held in cold storage. Back in September in an interview with CNBC, ex SEC Chair Jay Clayton said:
“given that they (cryptocurrency) trade on largely unregulated exchanges? How can we be sure those prices aren’t subject to significant manipulation?”
Valkyrie acknowledged the problem in the filing and wrote:
“These potential consequences of such a Bitcoin Exchange’s failure could adversely affect the value of the Shares.”
Valkyrie didn’t provide solutions to this problem apart from noting that a few low-quality exchanges shut down and that the ETF will refer to the Chicago Mercantile Exchange’s reference price for BTC. It could be because of the new administration but Clayton left the SEC while Trump left the White House. Days after Clayton left, VanEck filed another application for a Bitcoin ETF which it withdrew in 2019. Biden appointed Allison Herren Lee as the acting chair and nominated Gary Gensler as the new chair of the SEC.
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