The crypto-focused financial services firm,Galaxy Digital Holdings, run by ex-hedge fund manager Mike Novogratz, is seeking approval of SEC to start a bitcoin futures exchange-traded fund.

SEC Chairman Gary Gensler recently hinted that he may become open to approving a bitcoin futures ETF under a 1940 law governing mutual funds. Bitcoin futures contracts are traded on the Chicago Mercantile Exchange. Due to crypto’s high volatile nature and market manipulation, the SEC hasn't yet approved any ETF that is tied to actual Bitcoin.

Galaxy and other firms are waiting for the SEC's approval for physically-backed bitcoin ETFs. If approved, Galaxy Digital plans to invest in bitcoin futures contracts.

Galaxy Digital is a sub-advisor to a publicly traded bitcoin ETF in Canada, CI Galaxy Bitcoin ETF. Galaxy is still awaiting a approval on its April filing to launch a bitcoin ETF. Galaxy’s filing follows the company’s Q2 2021 statement with the SEC on financial results. More than $1.6 billion assets are reported under management.

Galaxy Digital is the latest asset manager to file for a Bitcoin futures ETF. Bitcoin futures ETF appears to be a viable option to launch a regulated crypto investment vehicle in the U.S. If approved Galaxy’s Bitcoin Strategy ETF is approved, it will be listed on the Nasdaq exchange.

Galaxy Digital is making another attempt, four months after applying for a Bitcoin ETF, But this time an investment vehicle is tied to Bitcoin futures.

Gensler's speech has also disappointed some crypto enthusiasts and fund managers since the lucrative looking bitcoin investment vehicle is a physically-backed ETF some crypto enthusiasts and fund managers are disappointed. Such crypto would be regulated like regular ETFs according to a 1933 law.

The first attempt at bitcoin ETF approval was taken in 2013 by the Winklevoss twins who are founders of the Gemini crypto exchange, Cameron and Tyler.

Rushali Das

CBW - External Analyst

INDIA