By
Chimamanda U. Martha
April 26th, 2024
Regulators in the United States now have additional exchange-traded funds (ETF) to consider as it was revealed that Galaxy Digital, an investment management firm in the crypto space, has filed for a Bitcoin futures ETF.
According to the filing, the new ETF would not be investing directly in the flagship digital assets, instead its investment would only be focused on Bitcoin futures.
Bitcoin futures, according to Investopedia, enable investors to gain exposure to Bitcoin (BTC/USD) without having to hold the underlying cryptocurrency. What this means is that investors would “take cash instead of physical delivery of bitcoin upon settlement of the contract.”
This development could be in line with an earlier statement made by the chairman of the Securities and Exchange Commission (SEC), Gary Gensler, who said he was more comfortable with the idea of an ETF based on futures contracts rather than those which offer direct exposure to the digital assets.
Another requirement of Gensler is that the application should be filed under the 1940 act which he believes regulates closed-end funds and mutual funds whilst also offering substantial protection to investors of such funds. Notably, Galaxy Digital application was filed for under this act.
Chief Bloomberg expert on ETFs Eric Balchunas while commenting on the filing said it was “as Gensler-ready as you can get.” He also added that this was the fifth filing the authorities would be getting for a Bitcoin ETF.
However, despite the numbers of applications the SEC has gotten, it is yet to approve a single one. The authorities have always highlighted how the high volatility rate of the space is one of the reasons why it is not willing to license an ETF yet.
Despite the reluctance of the US, its neighbor, Canada has approved as many as 3 ETFs due to the increased level of demand for the space, and one of them is being run by Galaxy Digital — CI Galaxy Bitcoin ETF.
Galaxy Digital Continues Investments Into Crypto Space
Apart from its recent Bitcoin ETF filing, we recently reported that Galaxy Digital was involved in the funding of blockchain infrastructure provider Figment.
Figment had announced that it had gotten a $50 million fundraise in Series B from institutional giants like the Mike Novogratz-led Galaxy Digital and others like Anchorage Digital, Finality Capital Partners, others.
Also, Galaxy Digital had earlier acquired BitGo, one of the earliest crypto custodial service provider in the market. The acquisition of the firm, it is believed is geared towards complementing the services already on offer at Galaxy Digital.
