Over the years, many, many proposals have crossed the SEC’s desk—at least twelve, by our count, and the regulator hasn’t approved any of them.
For starters, several cryptocurrency ETFs have already launched abroad, including three Bitcoin ETFs in Canada and as many Ethereum funds.
In addition, there’s been a changing of the guard at the SEC.
Currently, eight applications sit before the SEC.
Four of the ETFs have also had 19b-4 forms filed on their behalf.
Historically, the SEC has pushed out these review periods as much as possible; in fact, the SEC just extended the review period for the 19b-4 Cboe filed on behalf of the VanEck application.
That said, the 240 day window is “binding,” at least as much as anything at regulator’s hands ever is—and given that the VanEck 19b-4 was filed on March 1, it means the SEC has until the end of this year to make a call one way or the other on the firm’s proposal.
The benchmark is calculated daily using the one-hour volume-weighted average Bitcoin prices from the top five crypto exchanges, out of a universe of 165 crypto exchanges worldwide.
It also deters price collusion, by forcing would-be malicious actors—or even the exchanges themselves—to succeed in their efforts across not just one exchange but five; and over an extended period of time long enough to surely attract the notice of security experts and regulators.
VanEck’s spin on the consolidated tape is that its benchmark rate is calculated over the course of an hour, using the median prices found on each exchange over twenty 3-minute intervals, which are then averaged.
The Valkyrie Bitcoin Fund introduces some tweaks to the VanEck approach.
This rate is very similar to the volume-weighted average price approach in the MVIS index, and the five exchanges from which it aggregates trade flow are the same: Bitstamp, Coinbase, Gemini, itBit, and Kraken.
There are all sorts of trading reasons to favor using either cash or in-kind create/redeems—a thorny topic, and one best left for another time.
Another complicating factor is timing: in-kind creates/redeems for the Valkyrie fund will process the day the order is placed, while cash-ish creates/redeems will take place the day after.
Bitcoins are stored both in a wallet account and a vault account; and the private keys to the bitcoins are held in cold storage vaults around the world, including the U.S., Switzerland, South America, and elsewhere.
Valkyrie lists Coinbase as its custodian—Coinbase being one of the largest crypto exchanges in the world, and supplier of one of the five reference prices that go into the calculation of the ETF’s index value.
The NYDIG Bitcoin ETF is one of two actively managed bitcoin ETFs before the SEC—though its prospectus doesn’t outright use the words “active management,” only that the fund does not track a benchmark or index.
That’s in turn defined as venues that trade in dollars, that have certain fraud protection programs in place, and that demonstrate market quality, data integrity, and regulatory compliance.
From there, NYDIG values Bitcoin using transactions in a designated “principal active market”: generally, whichever venue has the highest trading volume and activity .
NYDIG plans to self-custody the fund via a subsidiary.
That said, smaller creation units can add frictional costs, and are more of a pain for administrators and custodians to work with—and as a result, those service providers may charge slightly higher fees to transact.
WisdomTree’s U.S.
WisdomTree has clearly made a firm-wide commitment to crypto-tech: the firm has filed for other crypto-related products in the United States, even a short-term Treasury fund based on the blockchain; and of course, it has already launched a Bitcoin ETP and Ethereum ETP in Europe.
However, this isn’t Scaramucci’s first foray into Bitcoin.
Like the NYDIG proposed ETF, the First Trust/Skybridge version would value Bitcoin based on GAAP.
Where the two active ETF proposals differ, though, is in the details about security.
The Wise Origin Bitcoin Trust would track the Fidelity Bitcoin Index, which is a price return benchmark constructed using Bitcoin feeds from eligible spot markets.
Eligible markets include all U.S.-based digital exchanges; eligibility is determined twice a year, or more frequently during market disruptions.
Like the WisdomTree proposal, the Kryptoin ETF would use the CF Bitcoin US Settlement Price to determine the price of Bitcoin.
A 50k lot size is fairly standard for the ETF world, threading the needle between ease of use for APs and economies of scale for fund service providers.
Furthermore, Kryptoin’s is the only proposal where all intended service providers are listed by name.
Although the Kryptoin Bitcoin ETF Trust would be Kryptoin’s first foray into the ETF space, this isn’t the firm’s first Bitcoin ETF filing; the Delaware-based investment advisor unsuccessfully filed for a fund in 2019.
The benchmark, yet another take on the “consolidated tape,” is based on Bitcoin prices aggregated from trading venues selected by the index provider for their pricing consistency, frequency, and market quality.
Galaxy argues this length of time is long enough to make it difficult for collusion or manipulation to occur, but it’s one-fourth that proposed by the other approaches.
Waiting in the wings and watching all this action is the Grayscale Bitcoin Trust , a closed-end fund listed in Europe.
Speculation has arisen that Grayscale may be intending to convert that existing vehicle to a Bitcoin fund, in the same way that ETFMG once converted a zombie Latin American real estate fund to the world’s first marijuana ETF.
Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company.
Having written $4.6 billion off the value of the businesses in 2018, Verizon will get just $4.25 billion in cash from private equity firm Apollo Global, along with preferred interests of $750 million and a 10% stake in the unit – about half of what it had paid for the businesses.
She’s repeatedly said that despite the broader rotation out of high-growth companies and into value stocks, her team maintains their conviction in innovative technologies and has a five-year time horizon.“Twitter fits well with Ark and Cathie Wood’s” investment style, said Ross Mayfield, investment strategy analyst at Robert W.
If it were to stay at that level though, Crandall believes the Fed “would probably move promptly” to adjust the interest on excess reserves rate and the rate for the Fed’s reverse repurchase agreement facility, even as it keeps its main target range unchanged.Officials from the central bank, including Chair Jerome Powell and the New York Fed’s Lorie Logan, have said in recent months that they are open to adjusting administered rates as needed.Rates for short-term dollar borrowing have been driven to zero and below, weighed down by Fed asset purchases, a drawdown of the U.S.
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