The SkyBridge Capital hedge fund has filed an application for an exchange-traded fund (ETF) that invests in crypto companies.
United States hedge fund SkyBridge Capital has joined the long list of firms sending in applications for crypto-based ETFs. According to an SEC filing, the company has applied for a fund called the Crypto Industry and Digital Economy ETF.
However, like many other crypto ETFs that have been submitted in the past few months, the fund will not directly invest in bitcoin or any other cryptocurrencies. Instead, it will invest 80% of its net assets in the shares of companies that work in the crypto space. In other words, it does not offer direct exposure to bitcoin, which may be slightly more amenable from the SEC’s viewpoint.
It notes that while there is promise in the rapidly emerging cryptocurrency industry, there are also several risks associated with such a fledgling technology. It asks investors to be aware of this and to be prepared for regulatory challenges and volatility.
The SEC is hard at work preparing a regulatory framework for the industry, and it seems likely that this will be released by the end of the year. The regulatory body has several ETF applications on its plate, having delayed previous applications.
Many supporters of crypto ETFs feel that the protections that come with exchange-traded funds will do the market good. Furthermore, investors will have access to the market indirectly through a trusted investment vehicle rather than resorting to trading platforms.
SEC’s decision on ETFs likely to arrive this year
The delays in the SEC’s decision on crypto-based ETFs have irked the market somewhat, but it hasn’t stopped firms from sending in applications. They are all eager to become the first funds to launch a crypto-based ETF in the U.S. — something that could be extremely lucrative.
They may not have to wait much longer, as other reports indicate that U.S. authorities are forming a broader framework. The U.S. seems to be focusing on stablecoins for the moment, with a more general focus on investor protection as well. These developments hint at a decision from the SEC on ETFs.
It’s difficult to say whether the decision will be an approval without knowledge of the specific regulatory guidelines. But there is some hope yet for the market, as at worst, it means that an ETF will be delayed. There is nothing to suggest that the U.S. will impose draconian restrictions on the market.
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