SEC reportedly knocks back Valkyrie's leveraged Bitcoin ETF

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The SEC does not look to person the appetite for much exotic Bitcoin futures products.

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SEC reportedly knocks backmost  Valkyrie's leveraged Bitcoin ETF

Reports are emerging that the U.S. Securities and Exchange Commission has rejected one, oregon perchance two, caller Bitcoin exchange-traded money applications signaling that the regulator is not rather acceptable for much exotic futures products conscionable yet.

Just a time oregon truthful aft Valkyrie filed for a leveraged Bitcoin futures ETF and Direxion applied for an inverse money for bears, the SEC appears to person vetoed them both.

On Oct. 28, Bloomberg’s elder ETF expert Eric Balchunas referred to a Dow Jones alert indicating the Valkyrie leveraged money had been shelved by the SEC. He added that the determination was apt besides to use to the inverse money application.

Looks similar the SEC not having it w the levered (and apt inverse) Bitcoin futures ETFs. Can’t wounded to effort tho. Had they gone done apt cardinal dollar trading vehicles successful a fewer yrs. via Dow Jones

— Eric Balchunas (@EricBalchunas) October 27, 2021

On Oct. 26, ETF issuer Direxion filed for a Bitcoin Strategy Bear ETF that would alteration speculators to bargain futures that abbreviated the terms of BTC. On the aforesaid day, Valkyrie filed for a leveraged BTC futures ETF that would person offered 1.25x vulnerability to the asset.

The Direxion merchandise invested purely successful futures, however, the Valkyrie 1 would person held futures, swaps, options, and forwards. Another Dow Jones alert reported the SEC lone seems funny successful nonstop futures products astatine the moment, funds that bargain contracts from the Chicago Mercantile Exchange (CME).

The regulator does not look keen to o.k. immoderate products that put successful the plus itself oregon thing different than CME futures contracts astatine this stage. Balchunas confirmed:

“Would beryllium absorbing (and poss) if they fto the Inverse 1 spell through. That 1 was constricted to futures. Valkyrie’s was a spot of a departure from that language.”

Related: Crypto breaks Wall Street’s ETF barrier: A watershed infinitesimal oregon stopgap?

ETF Store President, Nate Geraci, reported that 2 much ETFs had been applied for connected Oct. 27 from AXS Investments. The SEC filings are for a regular Bitcoin Strategy ETF akin to the 2 already approved, and different shorting oregon inverse fund.

Another Dow Jones study states that Grayscale is assured that the SEC volition beryllium acceptable to o.k. a spot Bitcoin ETF by July 2022.

On Oct. 19, Grayscale filed an exertion with the SEC to person its fashionable Bitcoin Trust (GBTC) into a spot fund that is backed by the plus itself arsenic opposed to futures contracts.

Geraci, commented connected the existent deficiency of regularisation implicit spot crypto markets, “So crypto markets/exchanges volition beryllium regulated by then? Seems ambitious.”

In related news, VanEck is making last preparations for the motorboat of its Bitcoin Strategy ETF which volition commercialized nether the ticker XBTF. On Wednesday, Balchunas said determination was a “good chance” it could commencement trading connected Friday, Oct. 29, but perchance Thursday.

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