In its latest futures-based exchange-traded fund (ETF) filing, Valkyrie Funds tapped a popular meme in the financial Twitter community, known as "fintwit," to drive attention and interest.
On May 16, Investment Firm Filed New Bitcoin Application The futures-based ETF will be listed on Nasdaq under the ticker symbol "BTFD." Neither of Valkyrie's bitcoin-focused funds has direct exposure to bitcoin itself; futures traded on the Chicago Mercantile Exchange. Bitcoin futures are financial contracts that allow investors to speculate on the future price movement of Bitcoin. These contracts obligate the buyer to buy or sell bitcoins at a predetermined price on a specific date in the future. Unlike bitcoin trading, which involves owning and holding the digital asset itself, bitcoin futures enable traders to speculate on the price of bitcoin without owning it directly.
According to reports, in October 2021, the company revised the hint code, which was originally designed for the first fund. Compared to the company's existing Block Trading Facility (BTF) fund, the newly proposed fund will provide leverage, allowing speculators to increase their exposure to the dominant cryptocurrency. BTFs are actively managed ETFs offered through Nasdaq that invest primarily in Bitcoin futures contracts. So far, the market has witnessed the launch of four different Bitcoin futures-based ETFs. The first is the ProShares Bit Coin Futures ETF, launching in October 2021.
To date, the US Securities and Exchange Commission (SEC) has repeatedly rejected the introduction of bitcoin spot ETFs or funds with direct exposure to the major cryptocurrency, citing concerns about potential market manipulation in the bitcoin market. Digital asset manager Gray scale is currently embedded in a long-running legal battle with the SEC as it attempts to convert its struggling Grayscale Bitcoin Trust into a bitcoin spot ETF. The investment firm criticized the SEC's decision to authorize futures-based ETFs instead of spot ETFs, calling it "illogical."
In March, a judge presiding over two substantial disputes at the US Court of Appeals for the District of Columbia Circuit said the SEC “must provide a thorough explanation of its understanding of the connection between bitcoin futures and spot” the price of bitcoin.
