In a major development for the crypto industry, Invesco, one of the world’s largest asset managers with $1.5 trillion in assets under management, has partnered with Galaxy Digital, a leading digital asset firm, to file for a spot Bitcoin ETF with the US Securities and Exchange Commission (SEC).
A spot Bitcoin ETF is a type of exchange-traded fund that tracks the price of Bitcoin directly, rather than through derivatives or trusts. This means that the ETF would hold actual Bitcoin in custody and allow investors to gain exposure to the cryptocurrency without having to buy, store, or manage it themselves.
The Invesco-Galaxy partnership is significant because it combines the expertise and reputation of both firms in the traditional and digital asset markets. Invesco is a well-known name in the ETF space, with over 230 ETFs listed in the US and more than $405 billion in ETF assets. Galaxy Digital is a pioneer in the crypto industry, founded by former hedge fund manager and Bitcoin bull Mike Novogratz. Galaxy Digital provides a range of services and products for institutional and retail investors, including trading, asset management, custody, mining, and advisory.
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The filing of the spot Bitcoin ETF comes amid growing demand and anticipation for such a product in the US. Several other firms, including Fidelity, VanEck, and Valkyrie, have also filed for spot Bitcoin ETFs with the SEC, but none have been approved yet. The SEC has been cautious and skeptical about approving crypto-related ETFs, citing concerns over market manipulation, fraud, custody, and investor protection.
However, some analysts and industry experts believe that the SEC may soon change its stance and approve a spot Bitcoin ETF, especially after Canada became the first North American country to do so earlier this year. A spot Bitcoin ETF could potentially boost the adoption and legitimacy of Bitcoin and crypto in general, as it would provide an easy and regulated way for mainstream investors to access the market.
The Invesco-Galaxy spot Bitcoin ETF is expected to trade on the NYSE Arca exchange under the ticker symbol BTCX. The filing did not disclose the fees or launch date of the ETF, which are subject to SEC approval. The filing also stated that the ETF may invest in other digital assets besides Bitcoin in the future.
Novogratz thinks bitcoin ETFs will be approved this year.
One of the most prominent figures in the cryptocurrency industry, Mike Novogratz, has expressed his optimism that the US Securities and Exchange Commission (SEC) will finally approve bitcoin exchange-traded funds (ETFs) this year. Novogratz, who is the founder and CEO of Galaxy Digital, a crypto-focused investment firm, made his prediction in an interview with CNBC on Wednesday.
Novogratz said that he believes the SEC is under pressure to greenlight bitcoin ETFs, as more and more investors are looking for exposure to the leading cryptocurrency. He also cited the success of bitcoin ETFs in Canada, where several funds have launched and attracted significant inflows.
“I think Gary Gensler, who is a smart guy and understands crypto well, understands that we need to have some regulatory clarity,” Novogratz said, referring to the SEC chairman. “And so, I’m hoping by the end of the year we get an ETF. I think it would be a big deal for the ecosystem.”
Bitcoin ETFs are seen as a potential catalyst for boosting the adoption and liquidity of the cryptocurrency, as they would allow investors to access bitcoin without having to deal with the technical challenges of buying and storing it directly. Bitcoin ETFs would also provide more regulatory oversight and transparency for the crypto market.
However, the SEC has been reluctant to approve any bitcoin ETF proposals so far, citing concerns over market manipulation, fraud, and investor protection. The regulator has repeatedly delayed or rejected applications from various firms, including VanEck, WisdomTree, and Bitwise.
Novogratz said that he thinks the SEC is waiting for more data and evidence that the crypto market is mature and resilient enough to support a bitcoin ETF. He also said that he expects the SEC to approve a futures-based bitcoin ETF first, rather than a spot-based one, as futures are regulated by the Commodity Futures Trading Commission (CFTC).
“I think they’re more comfortable with something that’s under their jurisdiction,” he said. Novogratz added that he is bullish on bitcoin in the long term, despite the recent volatility and regulatory uncertainty. He said that he expects bitcoin to reach $100,000 by the end of the year, driven by institutional and retail demand. “I think we’re in a secular bull market,” he said. “I think we’re just getting started.”
Gary Gensler actively collaborating with Bitcoin spot ETF issuers to finalize their filings.
In a major development for the crypto industry, the US Securities and Exchange Commission (SEC) chair Gary Gensler has reportedly been in talks with several Bitcoin spot ETF issuers to expedite their approval process. According to sources familiar with the matter, Gensler is keen on launching a Bitcoin spot ETF as soon as possible, as he believes it would provide more transparency and investor protection than the existing Bitcoin futures ETFs.
A Bitcoin spot ETF is an exchange-traded fund that tracks the price of Bitcoin directly, rather than through derivatives contracts. This means that the fund would hold actual Bitcoin in custody, and investors would be able to redeem their shares for Bitcoin if they wish.
A Bitcoin futures ETF, on the other hand, tracks the price of Bitcoin through futures contracts traded on regulated exchanges, such as the Chicago Mercantile Exchange (CME). These contracts are settled in cash, not in Bitcoin, and they may incur additional fees and risks.
The SEC has so far approved four Bitcoin futures ETFs, which have collectively attracted over $2 billion in assets under management since their launch in October. However, many crypto enthusiasts and experts have argued that a Bitcoin spot ETF would be more beneficial for the industry, as it would reflect the true demand and supply of Bitcoin and reduce the potential for market manipulation and arbitrage.
Moreover, a Bitcoin spot ETF would lower the barriers to entry for retail investors, who may not have access to futures trading platforms or may not want to deal with the complexities and costs of futures contracts.
Gensler, who has been vocal about his support for innovation and regulation in the crypto space, has apparently recognized these advantages and is now actively collaborating with Bitcoin spot ETF issuers to finalize their filings. According to the sources, Gensler is particularly interested in ensuring that the issuers have robust anti-money laundering (AML) and know-your-customer (KYC) policies, as well as adequate security measures to safeguard the Bitcoin holdings from theft or loss.
He is also looking for assurances that the issuers have sufficient liquidity providers and market makers to ensure a fair and efficient price discovery process.
The sources did not reveal the names of the issuers that Gensler is in contact with, but some of the candidates that have filed for a Bitcoin spot ETF include VanEck, Fidelity, WisdomTree, NYDIG, Valkyrie, and Bitwise. These issuers have been waiting for months or even years for the SEC to review their applications, but they may soon see their efforts pay off if Gensler’s initiative succeeds.
A Bitcoin spot ETF would be a game-changer for the crypto industry, as it would signal the SEC’s recognition and acceptance of Bitcoin as a legitimate asset class. It would also boost the adoption and awareness of Bitcoin among mainstream investors, who may prefer a regulated and convenient way to gain exposure to the leading cryptocurrency.
Furthermore, it would increase the competition and innovation in the crypto ETF space, which could lead to more products and services that cater to different needs and preferences of investors.
The SEC has not officially confirmed or denied Gensler’s involvement in the Bitcoin spot ETF discussions, but the sources said that an announcement could be made in the coming weeks or months. If true, this would be a welcome surprise for the crypto community, which has been eagerly awaiting a green light from the SEC for a long time. A Bitcoin spot ETF could be the catalyst that propels Bitcoin to new heights, as it would unleash a wave of institutional and retail capital into the market.