Bitcoin ETF: Will the SEC let the New York Digital Investment Group through?
Investment companies are not giving up hope for a Bitcoin ETF in the US. When will the SEC finally be willing to rethink?
The Bitcoin ETF issue is going into the next round. The latest application comes from the New York Digital Investment Group (NYDIG). It has filed papers with the United States Securities and Exchange Commission (SEC) to launch Crypto Code a Bitcoin exchange-traded fund. Accordingly, the Form S-1 used for this purpose identifies NYDIG Trust Company LLC as the fund’s Bitcoin custodian and the US investment bank Morgan Stanley as an authorised participant.
NYDIG is truly no stranger to the crypto scene. The investment firm has long been eager to offer more institutional exposure to digital assets like Bitcoin. Back in November and December 2020, the firm raised US$150 million through two separate cryptocurrency investment funds. NYDIG was granted a BitLicense by the New York State Department of Financial Services in 2018. Moreover, Stone Ridge, the parent company of NYDIG, is one of the largest institutional holders of Bitcoin anywhere.
Will BTC price action force the SEC to rethink?
As an authorised participant, Morgan Stanley is expected to sell shares to the public. The price will be based on the fund’s assets, supply and demand, and prevailing market conditions. If the SEC approves the application, the shares will trade on the NYSE Arca exchange under a ticker symbol to be determined. The investment objective of the Trust is to reflect the performance of the price of Bitcoin less the expenses of running the Trust. The Trust will not seek to reflect the performance of any benchmark or index.
The Bitcoin ETF issue is a tricky one, at least in the United States. The US Securities and Exchange Commission (SEC) has so far put every applicant in their place. The latest statements by the new US Treasury Secretary Janet Yellen did not exactly indicate great crypto-enthusiasm on the part of the former head of the Federal Reserve. How the SEC will decide this time remains to be seen for the time being. Even if the chances are perhaps somewhat better this time with the current all-time high of BTC and the investment of some large US corporations, first and foremost Tesla, of course. In neighbouring Canada, people are already thinking one step ahead. There, a Bitcoin ETF recently celebrated its North American premiere. The hopes of Bitcoin fans are now resting on Gary Gensler, who is to become the new head of the SEC. However, the former Goldman Sachs manager has rather a reputation as a hardliner.