Odaily Frontline｜New government, new atmosphere? Valkyrie Files Bitcoin ETF Application with SEC
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Summary:
Summary:
Digital asset management firm Valkyrie submitted a bitcoin ETF application on Jan. 22.
ETFs can bring new money to the crypto market, increasing demand.
Although applications for a Bitcoin ETF have so far been unsuccessful, the new U.S. administration may change its tune.Valkyrie Digital Assets, the crypto subsidiary of investment firm Valkyrie Investments, has filed with the U.S. Securities and Exchange Commission (SEC).。
Application documents for Bitcoin ETF
Valkyrie’s filing makes it the second firm to file for a bitcoin ETF recently, following VanEck’s resubmission last month.
A Bitcoin ETF is a financial product listed on the stock market that tracks the underlying price of Bitcoin.
The advantage of a bitcoin ETF for investors is that it can be invested in a tax-sheltered account, available to retail investors and "accredited" (wealthy) investors, and will handle the custody of bitcoin on behalf of investors.
It may also be cheaper than currently publicly traded bitcoin offerings, most notably the Grayscale Bitcoin Trust. Grayscale Bitcoin Trust often sells shares for far more than the value of the bitcoin it represents.
The advantage of a Bitcoin ETF for the crypto economy is that it can bring a lot of new money into the crypto market, driving up demand and, with luck, the price of Bitcoin.
Valkyrie plans to offer trading on the product on NYSE Arca. “Provide investors with an efficient means to implement a variety of investment strategies,” the company wrote in the filing. Xapo will be responsible for custody of bitcoin, and all funds will be held in cold storage.
in September 2019In an interview with CNBCIn an interview with CNBC
, former SEC Chairman Jay Clayton said, "Given that they (cryptocurrencies) are traded on largely unregulated exchanges? How can we be sure that these prices are not subject to significant manipulation?"
Valkyrie acknowledged the problem in the document. Valkyrie doesn’t really offer any solution to the problem though, other than pointing out that several low-quality exchanges were closed, and that its ETF will reference the CME’s bitcoin reference price.
The company mentioned in the risk assessment, “Although the Valkyrie Bitcoin Fund itself does not buy and sell Bitcoin on the Bitcoin trading platform, the certainty of the Bitcoin trading market may affect the trust’s operations and share value. Negative perceptions, Bitcoin The lack of stability in the currency trading market and the closure or temporary closure of digital asset trading platforms due to fraud, business failure, hacking or malware, or government-mandated regulation may reduce people's confidence in the Bitcoin network and lead to a greater increase in the price of Bitcoin. In addition, data from the Bitcoin exchange is used in the calculation of the price of the Bitcoin Index, and if the Bitcoin exchange is closed or temporarily closed, it may lead to a loss of confidence in the Trust's ability to determine its net asset value on a daily basis. These Bitcoins The potential consequences of a trading platform failure could adversely affect the value of this product share. In addition, the failure of the Bitcoin market, a major Bitcoin trading platform, or any other major component of the overall Bitcoin ecosystem could have a negative impact on Bitcoin's Liquidity and price have a direct negative impact and therefore may also have a negative impact on the trust's performance."
But why have companies started to try to apply for Bitcoin ETF?
This may be because of the new government. Former SEC Chairman Clayton left his post last month, and former U.S. President Donald Trump left the White House this week. Days after Clayton left, VanEck resubmitted its application for a bitcoin ETF, which it had previously withdrawn in September 2019.New President Joe Biden has appointed Allison Herren Lee as acting SEC chairman and nominated Gary Gensler as the new SEC chairman. in 2019 forColumn written by CoinDesk
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