As investor demand for crypto products rises, exchange-traded fund (ETF) issuer Global X, which currently manages nearly $44 billion, has filed to launch a bitcoin futures fund.
According to a filing with the SEC on July 20th, the firm that manages 108 ETFs will issue the fund in collaboration with CoinDesk Indices, a subsidiary of the widely read crypto news site. The index would be based on CoinDesk Indices' quantitative pricing predictor, and the fund would mirror its performance.
Investors are watching the Securities and Exchange Commission as they consider whether or not to approve the first spot bitcoin exchange-traded fund. The proposed fund is unique because its structure, which is approved by the SEC, allows investors to gain exposure to fluctuations in the price of bitcoin futures contracts. The Global X Blockchain and Bitcoin Strategy ETF (BITS) is already in operation, and it is widely expected that the new filing will be approved by the regulatory body.
Bitcoin Exchange Traded Fund for Spot Trades
According to a tweet by Bloomberg Intelligence ETF analyst James Seyffart, the SEC's approval of the new Global X Bitcoin Strategy ETF is "not even debatable at this point." It is unclear whether the SEC will approve any so-called "spotcoins," such as the spot bitcoin ETF that Global X has applied for.
The buzz surrounding cryptocurrency exchange-traded funds (ETFs) has been a boon for the broader exchange-traded product market. Since BlackRock filed for a spot-based ETF on June 15, investors have poured $757 million into bitcoin exchange-traded products, data from crypto research firm K33 shows.
The filing indicates that quantitative analysis of the underlying index will be used to determine when and how much to rebalance the ETF. According to the filing, when the index sees favourable conditions, it will increase its allocation to bitcoin futures, and when it sees unfavourable ones, it will increase its allocation to the Global X 1-3 Month T-Bill ETF (CLIP).
In April, CoinDesk Indices introduced a tracking and forecasting algorithm for the strength of the trend in bitcoin's price. Bitcoin price trends are something the index hopes to shed light on, the company said in a statement upon the index's launch.