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News Report

SEC Extends Valkyrie Bitcoin Fund Decision Deadline Despite Recent ETF Approvals

2 mins
Updated by Kyle Baird

In Brief

  • SEC is not ready to decide on Valkyrie's bitcoin-backed ETF,
  • VanEck bitcoin ETF deadline date approaching.
  • ProShares bitcoin ETF trading has leveled out at around $1B.
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Following a flurry of activity and approvals late last month, the U.S. Securities and Exchange Commission is back to its procrastination with more bitcoin fund deadline extensions.

In a notice of designation filed on Nov 1, the SEC has again stated that it needs more time to decide on whether to approve or decline Valkyrie’s Bitcoin Fund.

The new deadline date has been pushed back from Nov 8 to Jan 7, 2022. It’s the third time the decision has been postponed following delays in June and August. The announcement stated, “The Commission is extending the time period for approving or disapproving the proposed rule change for an additional 60 days.”

Bitcoin-backed funds delayed

This fund is different from Valkyrie’s Bitcoin Strategy ETF which was approved by the SEC and launched on the Nasdaq on Oct. 22 trading under the ticker BTF.

The Valkyrie Bitcoin Trust with the proposed BTCV ticker was originally filed with the SEC in January 2021.

This ETF issues common shares which represent units of “fractional undivided beneficial interest” in the Trust which holds Bitcoin directly. The BTF fund invests in futures contracts on the Chicago Mercantile Exchange, which the SEC seems to prefer at the moment.

The current mood at the SEC appears to lean against any exotic crypto funds that stray from straight futures. The regulator has already rejected a leveraged BTC fund proposed by Valkyrie.

ETF issuer Direxion has reportedly pulled the plug on its inverse Bitcoin Strategy Bear ETF that would have enabled speculators to buy futures that short the price of BTC.

Bloomberg Intelligence analyst James Seyffart said that the next on the list likely to be approved is the VanEck Bitcoin Trust which is a spot-based ETF.

“The next big ETF Decision date to watch here is Nov. 14. The SEC will likely deny VanEck’s application for a spot Bitcoin ETF. But the denial letter is likely to provide a lot of valuable insight into the SEC’s current view of crypto/bitcoin.”

On Nov. 3, Seyffart also reported that Advisor Shares and Morgan Creek’s managed Bitcoin ETF, CRYP, has also been delayed until Nov 19.  

BITO trading plateaus

Bloomberg senior ETF analyst Eric Balchunas reported on the ProShares BITO ETF stating that trading had started to plateau at just over a billion dollars.

“$BITO’s assets have plateaued at $1.1b-ish for a while. It still trades over $200m a day, a ton for new ETF and normally that would mean chunky inflows.”

As reported by BeInCrypto on Oct 25, BTC open interest on the CME surged to a record $5.4 billion following the two Bitcoin ETF launches.


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