The SEC just approved the closest thing to a US bitcoin ETF you can buy, for now | Currency News | Financial and Business News3 min read
- The US SEC has approved an ETF that tracks stocks with significant exposure to bitcoin.
- These firms hold a majority of their net assets in bitcoin or derive a majority of their profit or revenue from bitcoin-related activities.
- The actively-managed fund, Volt Crypto Industry Revolution and Tech ETF, was approved on October 5.
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A new exchange-traded fund may be as close as investors can get to having a US bitcoin ETF – at least for now.
The US Securities and Exchange Commission has approved Volt Equity’s ETF, which aims to track companies that hold a majority of their net assets in bitcoin or derive a majority of their profit or revenue from bitcoin-related activities like mining, lending, or manufacturing mining equipment, Tad Pak, CEO of the fund, told Insider.
He calls these “bitcoin revolution companies,” and is eyeing MicroStrategy, Marathon Digital Holdings, and Bitfarms, among others, for the actively managed fund.
Volt Crypto Industry Revolution and Tech ETF was approved on October 5 and will trade under the ticker BTCR. The news was first reported by New York Times DealBook. Pak told Insider he hopes to go public in the New York Stock Exchange in the next three weeks.
“I’m a strong believer in bitcoin and was excited about launching an ETF that could take advantage of the coming bitcoin revolution,” he told Insider. “We can get exposure to bitcoin without necessarily holding the coin, especially with options positions.”
This roundabout investing strategy is necessary because the SEC under Chair Gary Gensler has been putting off approving bitcoin ETFs – with nearly two dozens stuck in limbo – amid fears of potential for market manipulation. The US thus far has not approved a single one yet, though Gensler did recently note that he is more open to a bitcoin futures ETF. In Canada, however, bitcoin ETFs are available now.
As a result, the Volt ETF will not directly invest in bitcoin. Instead, it looks to put at least 80% of its net assets in “bitcoin revolution companies,” options, and ETFs with exposure to those companies. The rest is expected to gain broad equity market exposure to offset the risk of the portfolio.
The ETF will also look at indicators such as the Stock-to-Flow model, which evaluates the current stock of bitcoin against the flow of new bitcoin mined that year.
Pak said this is the first ETF that is bitcoin-focused, compared to others that invest in a broader range of digital assets.
“It seems like it’s not a big deal, but no one’s ever done that before,” he told Insider.
The fund is the fifth ETF that the San Francisco-based investment adviser has launched. But Pak said it was by far the hardest, noting repeated back and forth with the SEC.
While the reason for the numerous delays is unclear, Pak speculated it had something to do with the fund’s initial name, which was Volt Bitcoin Revolution ETF.
“It was very difficult to get this through, but we’re really glad that they finally approved it,” he said.