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AdvisorShares Submits Application for Bitcoin ETF

2 mins
Updated by Ryan James
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In Brief

  • The fund will indirectly trade in BTC futures by way of a subsidiary, organized under Cayman Islands laws.
  • Morgan Creek Capital Management will serve as the ETF's investment sub-advisor.
  • AdvisorShares joins the list of 12 or more to file BTC ETFs with the SEC.
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Investment management company AdvisorShares has filed with the U.S. Securities and Exchange Commission (SEC) for a bitcoin (BTC) futures exchange traded fund (ETF). 

The firm, based in Bethesda, Maryland, already offers a wide range of ETFs. 

In a prospectus submitted to the SEC, Advisor Shares outlined that the ETF would seek to achieve its investment goals by “investing all or substantially all of its assets in (i) exchange-traded futures contracts on bitcoin (“Bitcoin Futures”) and (ii) short duration fixed income securities and cash or cash equivalent investments.”

They went on to state they may also invest in exchange traded products (ETPs), as well as ETFs based outside of the U.S. Furthermore, they emphasized that the fund would not invest directly in BTC. According to the prospectus, it will instead invest in BTC futures indirectly, by way of a subsidiary organized under Cayman Islands laws.

Meanwhile, capital management firm Morgan Creek will serve as the ETF’s investment sub-advisor. In this capacity, Morgan Creek will use its research to implement the fund’s investment strategies. More specifically, it will be responsible for allocating the fund’s assets and determining when BTC’s price may rise and fall.

Rise in BTC ETF filings

At time of press, the SEC was facing at least a dozen applications for BTC ETFs; it was yet to approve a single one. A number of them only came in the last few weeks; those from Galaxy Digital and asset management giant Invesco. Meanwhile, some of them who filed much earlier in the year, such as WisdomTree, still await a final decision from the SEC.

Earlier this month, SEC Chair Gary Gensler said he anticipated “that there will be filings with regard to exchange-traded funds under the Investment Company Act…

“When combined with the other federal securities laws, the ’40 Act provides significant investor protections.”

He went on:

“Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures.”

The firms that have filed for BTC ETFs are standing firm in their applications; the same cannot be said for some of those filing for Ether (ETH) futures ETFs. Investment firm VanEck filed with the SEC for an ETH ETF, as reported on August 19. However, by August 20, the company had withdrawn its application. Fellow investment firm ProShares also withdrew their application for an ETH futures ETF only days after filing.

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Dale Hurst
Dale Hurst is a journalist, presenter, and novelist. Before joining the Be In Crypto team, he was an editor and senior journalist at a news, lifestyle and human-interest magazine in the UK. Cryptocurrency was one of the first subjects he specialized in when first going freelance in 2018, reviewing exchanges and analysing lawsuits.