After being initially discussed in 2021, the investment fund is now capitalizing on the meme-worthy ticker for its new leveraged Bitcoin ETF.
In its latest portfolio of futures-based exchange-traded funds (ETFs), Valkyrie Funds is using one of the most well-known names in the world, known as the “fintwit” of Twitter, to attract attention and interest.
On May 16, the investment company submitted a new application for Bitcoin BTC ($26,676) ETFs based on futures contracts will be listed on Nasdaq under the symbol “BTFD”.
Valkyrie’s two bitcoin-focused funds have no direct exposure to bitcoin itself; instead, they invest in Bitcoin Futures traded on the Chicago Mercantile Exchange. Bitcoin futures are financial contracts that allow investors to speculate on future price movements of Bitcoin. These contracts obligate the buyer or seller to sell bitcoins at a predetermined price on a certain date in the future. Unlike Bitcoin trading – which involves owning and holding the digital currency itself – Bitcoin futures allow traders to speculate on the price of Bitcoin without directly owning it.
Initially planned for the first fund, the company will renew the logo in October 2021. Unlike the company’s existing BTF (block trading facility) Fund, this proposed new fund will provide leverage, allowing speculators to increase their exposure to the dominant cryptocurrency. BTF is an active ETF available through Nasdaq that invests in Bitcoin futures. So far, the market has attempted to introduce four different ETFs of Bitcoin futures. The first, the ProShares Bitcoin Futures ETF, was launched in October 2021.
Meanwhile, the US Securities and Exchange Commission (SEC) has rejected many attempts to introduce Bitcoin spot ETFs or funds offering direct exposure to the ruling cryptocurrency, citing concerns about market fraud in the bitcoin market. Digital asset manager Grayscale is currently embroiled in a legal dispute with the SEC as it seeks to turn the troubled Greyscale Bitcoin Trust into a spot Bitcoin ETF. Investment firms have criticized the SEC’s decision to allow ETFs based on futures contracts instead of ETFs, calling it “unreasonable”.
In March, the judges in charge of the dispute between the two companies of the United States Court of Appeals for the District of Columbia Circuit expressed the opinion that the SEC “must provide a detailed explanation” of its understanding of the connection between Bitcoin future and defects bitcoin price.
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