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The US SEC is a very cautious regulatory body, one which seems to be lagging behind other developed country’s regulators with respect to the approval of a spot Bitcoin ETF product.
Valkyrie Investments has filed a new application with the United States Securities and Exchange Commission (SEC) to list the Valkyrie Bitcoin Miners ETF on the Nasdaq Exchange. Per the filing, the Exchange Traded Fund will not invest directly in Bitcoin, rather, it will inject 80% of the net proceeds of the fund into companies who are directly involved in Bitcoin mining, or which produces the hardware or software that is utilized in Proof-or-Work (PoW) mining.
Valkyrie is a big name in the fund management terrain as it ranks alongside ProShares as one of the firms managing a Bitcoin-Futures linked ETF that was approved by the SEC last year. While the company has a lot of investment products cutting across ETFs, Trusts and Decentralized Finance (DeFi), the Bitcoin Miners ETF is arguably its first mainstream product providing exposition to companies like Marathon Digital Holdings Inc (NASDAQ: MARA), and Greenidge Generation Holdings Inc (NASDAQ: GREE) amongst others.
The filing also revealed that the remaining 20% of the fund will be invested in companies that hold Bitcoin on their balance sheet. Based on the potential allocation formula of the fund as detailed in the filing, the new Valkyrie Bitcoin Miners ETF may also feature firms like MicroStrategy Incorporated (NASDAQ: MSTR), Block Inc (NYSE: SQ), and Tesla Inc (NASDAQ: TSLA), all of which has shored up their balance sheets with Bitcoin in the past year.
While the fund is billed to payout yield or returns to its investors, Valkyries published a risk disclosure in the filing to draw on the overall volatility surrounding the crypto ecosystem and how Bitcoin is impacted.
“As with all investments, there are certain risks of investing in the Fund. The Fund’s Shares will change in value and you could lose money by investing in the Fund. An investment in the Fund does not represent a complete investment program. An investment in the Fund is not a bank deposit and it is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency, the Adviser, Sub-Adviser, or any of their affiliates. You should consider carefully the following risks before investing in the Fund,” the filing reads.
Valkyrie ETF Does not Make Up the Spot Bitcoin ETF Shortfall
The US SEC is a very cautious regulatory body, one which seems to be lagging behind other developed country’s regulators with respect to the approval of a spot Bitcoin ETF product. While coming off as an innovative product offering that will broaden the horizon of exposition to Bitcoin investors, the Valkyrie Bitcoin Miners ETF will not make up the shortfall of an actual spot BTC exchange-traded fund that is missing in the United States.
While the SEC should be commended for its open-mindedness thus far, it will continue to lag behind nations like Canada, Germany, Switzerland, and Brazil in the Bitcoin and financial innovation race, most of whom have approved at least one spot Bitcoin ETF product.