Nasdaq reveals Valkyrie Bitcoin Futures ETF app

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The race to launch a bitcoin futures exchange-traded fund (ETF) for US investors now has a (procedural) favorite: Valkyrie Investments.

On Tuesday, a surprise regulatory filing by the Nasdaq to list and trade shares of the Valkyrie XBTO Bitcoin Futures Fund revealed the existence of the previously undisclosed ETF proposal, Valkyries Second, which seeks to encapsulate bitcoin futures contracts in a AND F.

In fact, it was really Valkyries first; the company said it confidentially filed the product months ago.

The fact that it now has a partner exchange means the SEC can start reviewing the product, bringing Valkyrie closer to judgment day on a bitcoin futures ETF than any other promising issuer.

The SEC is also considering a handful of Bitcoin ETF applications based on the underlying asset, rather than futures markets.

It remains to be seen whether the Valkyries product can pass the regulatory test. Industry watchers believe Gary Genslers Securities and Exchange Commission (SEC) might be more supportive of a bitcoin futures ETF proposal than the dozen ETF apps that would trade the asset itself.

I think we’re really the only ones with a pure-game term product, said Steve McClurg, CIO at Valkyrie. He said the company is XBTO’s partner for futures trading.

McClurg said the recently revealed Valkyrie Futures ETF is a so-called Law 33 fund, referring to the Securities Act of 1933, which could invest its assets in bitcoin futures exclusively. Many of the recent bitcoin term ETF deposits are said to be products of Bill 40, referencing the Investment Companies Act of 1940, which is expected to invest partially in fixed income securities or treasury bills, did he declare.

All of these regulatory minutiae could complicate the flow of the Valkyrie / XBTO funds. Gensler has expressed interest in 40 Act funds which they believe protect investors better than their 33 Act counterparts.

Gensler’s recent comments have fueled a wave of bespoke bitcoin term ETF deposits, including from Valkyrie, who filed an SEC 40 Act fund earlier this month.

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