GlobalX, a leading provider of exchange-traded funds (ETFs), has recently filed an amendment to its proposed Bitcoin Spot ETF with the U.S. Securities and Exchange Commission (SEC). The updated filing reveals some new details about how the fund would operate and what risks it would entail for investors.
According to the filing, the GlobalX Bitcoin Spot ETF would track the performance of the world’s largest cryptocurrency by market capitalization, based on the spot prices of various bitcoin platforms. The fund would not invest directly in bitcoin, but rather in a subsidiary that would hold bitcoin and transact with third-party custodians and service providers.
The filing also states that the fund would use a “fair value” methodology to determine the net asset value (NAV) of its shares, which would reflect the prevailing market prices of bitcoin across different platforms. The fund would also employ a “liquidity provider” to facilitate the creation and redemption of shares, as well as to provide liquidity in the secondary market.
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The GlobalX Bitcoin Spot ETF is one of several bitcoin-related ETFs that are awaiting approval from the SEC, which has repeatedly delayed or rejected such proposals in the past. The SEC has expressed concerns about the potential for fraud, manipulation, and lack of transparency in the bitcoin market, as well as the adequacy of investor protection and regulatory oversight.
However, some analysts believe that the SEC may be more receptive to bitcoin spot ETFs than to bitcoin futures ETFs, which are based on derivatives contracts rather than actual bitcoins. Bitcoin spot ETFs may offer more direct exposure to the underlying asset, lower fees, and less counterparty risk than bitcoin futures ETFs.
The GlobalX Bitcoin Spot ETF is expected to trade on the NYSE Arca under the ticker symbol GBTC. The fund has not yet announced its launch date or expense ratio. Investors who are interested in gaining exposure to bitcoin through an ETF should carefully read the fund’s prospectus and understand the risks involved before investing.
BlackRock has not filed for a Spot XRP ETF
Contrary to some rumors circulating online, BlackRock, the world’s largest asset manager, has not applied for a Spot XRP exchange-traded fund (ETF) in the US, a spokesperson for the company told The Block.
The speculation started after a document filed with the Securities and Exchange Commission (SEC) on November 14, 2023, showed that BlackRock had requested to launch an ETF that would invest in bitcoin futures contracts. Some XRP enthusiasts interpreted this as a sign that BlackRock was also interested in launching a similar product for XRP, the native cryptocurrency of the Ripple network.
However, this is not the case, according to the spokesperson. “BlackRock has no plans to launch a Spot XRP ETF at this time,” they said in an email. “The document filed with the SEC only pertains to a bitcoin futures ETF, which is still subject to regulatory approval.”
A CF would allow investors to gain exposure to the price movements of XRP without having to buy or store the actual tokens. Such a product would require the SEC to approve the listing and trading of XRP on a regulated exchange, something that has not happened yet.
The SEC is currently in a legal battle with Ripple, the company behind XRP, over whether XRP is a security or not. The agency alleges that Ripple and its executives sold unregistered securities worth over $1.3 billion through an ongoing initial coin offering (ICO). Ripple denies the charges and argues that XRP is a currency, not a security.
The outcome of the case could have significant implications for the future of XRP and its ecosystem. If the SEC wins, Ripple could face hefty fines and restrictions on how it can distribute and use XRP. If Ripple wins, it could clear the way for more regulatory clarity and innovation in the XRP space.
Until then, however, investors who want to bet on XRP will have to do so through other means, such as buying the tokens directly from exchanges or brokers or using derivatives such as futures or options. A Spot XRP ETF remains a distant possibility for now.