Valkyrie’s application for a spot Bitcoin ETF is another submission that will likely be rejected by the SEC based on its antecedents.
Digital asset fund manager Valkyrie has submitted an application for a Bitcoin (BTC) spot exchange-traded fund (ETF) to the United States Securities and Exchange Commission (SEC). The application adds Valkyrie to a list of firms trying to secure the first-ever spot Bitcoin ETF in the US.
Valkyrie submitted an S-1 Form to the SEC on Wednesday. According to the filing, the Valkyrie Bitcoin Fund will issue shares that reflect Bitcoin’s performance, minus liabilities and expenses. In addition, the filing states that Valkyrie will list with the “BRRR” ticker on the Nasdaq.
Valkyrie is not new to Bitcoin ETFs as it launched the Valkyrie Bitcoin Strategy ETF (BTF) in 2021, the second BTC futures ETF in the US. The fund manager also launched the Valkyrie Bitcoin Miners ETF (WGMI) in February. Through WGMI, Valkyrie offers exposure to Bitcoin miner stocks. However, Valkyrie’s major focus is on companies at least 77% powered by renewable energy. The fund will also channel up to 80% of its assets to firms that make Bitcoin mining profits of at least 50%.
The SEC has yet to approve a spot Bitcoin ETF. In May, Cboe Global Markets submitted its third application for the ARK 21Shares Bitcoin ETF after the SEC rejected the first two. On Monday, asset managers Invesco Ltd (NYSE: IVZ) and WisdomTree also submitted Bitcoin ETF applications to the Commission. The SEC rejected WisdomTree’s previous proposal last October.
Interestingly, BlackRock also joined the race for a spot Bitcoin ETF and applied to the SEC. BlackRock’s application lists Coinbase as the Bitcoin custodian and Bank of New York Mellon (BNY Mellon) as the custodian for cash holdings.
SEC May Reject Valkyrie’s Spot Bitcoin ETF Application
The SEC has previously rejected multiple spot Bitcoin ETF applications from Fidelity Investments, Grayscale Investments, and the New York Digital Investment Group (NYDIG). In all cases, the SEC said the proposals contained inadequate safeguards to prevent fraud and market manipulation.
Judging by its current stance, the SEC will likely reject Valkyrie’s spot Bitcoin ETF application. The Commission’s stance against Bitcoin ETFs has drawn the ire of the crypto community as many believe the SEC is being unnecessarily difficult.
Last year, Grayscale filed a lawsuit against the Commission, claiming that the SEC is exclusively applying a “flawed” test to Bitcoin ETFs. The investment firm filed a Petition for Review against the SEC hours after the Commission rejected the application. Grayscale also said the SEC uses a ‘special harshness’ to evaluate these proposals. Furthermore, the company described the Commission’s rejections as “arbitrary and capricious”.
In March, a panel of judges hearing the case against the SEC asked the SEC to properly explain its rejections, specifically how manipulation or fraud may affect futures and spot markets differently.
Bitcoin is reacting well to the multiple applications for a spot ETF. According to CoinMarketCap data, Bitcoin has climbed nearly 7% in the last 24 hours and is trading above $30,000.
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