Sunday, November 27, 2022

Just-In: SEC Grants Two New Applicants Rights To Issue Bitcoin Futures ETFs

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The number of Bitcoin futures exchange-traded funds trading in the US is about to increase to four.  The US Securities and Exchange Commission (SEC) has given NYSE Arca and Teucrium approval to issue a Bitcoin futures ETF. 

SEC approves Bitcoin futures ETF that may pave way for spot ETFs

The SEC published a notice on its website on Wednesday stating that the NYSE Arca exchange and Teucrium’s filing for the listing of a Bitcoin futures ETF had met the commission’s requirements.

This approval order is based on all of the Exchange’s representations and description of the Fund… IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the Exchange Act,129 that proposed rule change SR-NYSEArca-2021-53, as modified by Amendment No. 2, be, and hereby is, approved, the SEC ruled.

Teucrium is an ETF issuer with over 70 years of experience. Its other prominent ETFs focus mainly on agricultural products including wheat, corn, and soybean. Meanwhile, NYSE Arca is the first all-electronic exchange in the US. 

The parties filed their application for the futures ETF back in July 2021 under the Securities Exchange Act of 1933. The application suffered several setbacks as the SEC punted on reaching a decision, moving the deadline about four times, with two time extensions happening this year – in January and March.

However, the industry has entertained hope that the approval of this particular ETF could soften the ground for the approval of Bitcoin spot-settled ETFs. This is because the Act under which the ETF was filed is the same one Bitcoin spot ETFs have also been getting filed under. Other Bitcoin futures ETFs have so far been getting approval under the Investment Company Act of 1940.

Back in January, Bloomberg Intelligence’s James Seyffart pointed this out, noting that the approval of Teucrium’s future ETF under the ’33 Act would hinder some of the SEC prevalent arguments against spot ETFs.

SEC still resolutely rejecting Bitcoin spot ETFs

Before the latest approval, ProShares, Valkyrie, and VanEck were the only ETF managers allowed to list and trade bitcoin futures ETFs in the U.S. The SEC has been denying or delaying all Bitcoin spot ETFs.

In its decisions to deny, the SEC mentions that the way the proposed Bitcoin spot ETFs are structured leaves room for market manipulation and lacks a surveillance-sharing agreement between ETF issuers and a sizable market that trades Bitcoin.

This year, Bitcoin spot ETF applications that have been rejected include filings from ARK Invest, 21Shares, NYDIG, Global X, SkyBridge, and Fidelity. Grayscale, whose ETF is still awaiting a decision, has revealed that it may sue the SEC if its proposal to convert its GBTC fund to a spot ETF is rejected.

Disclaimer

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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