[Editor's Note: This story has been updated]
ProShares may be the first to the bitcoin-linked ETF market in the U.S., but it won’t be alone for much longer.
At least two more futures-based bitcoin ETFs are likely to roll out in the coming days to join the ProShares Bitcoin Strategy ETF (BITO), with the Valkyrie Bitcoin Strategy ETF (BTF) likely to launch on Friday after gaining effectiveness from the SEC late Wednesday night.
VanEck, Valkyrie Prepare To Launch
Valkyrie was pushing hard to launch earlier this week ahead of ProShares, arguing that it had confidentially filed for a futures-based bitcoin ETF under small-business rules well ahead of the rush of filings made in response to SEC Chairman Gary Gensler’s comments in favor of such a product.
However, Valkyrie’s first public filing to the SEC was on Aug. 11 of this year, which sets its automatic effectiveness date to this coming Saturday. The Nasdaq said BTFD was qualified to trade on the exchange on Friday and requested the SEC grant an earlier effective date for the fund to launch, but regulators have so far not done so.
Valkyrie’s fund has had an identity crisis of sorts this week. The ETF originally claimed the ticker “BTF” last Friday, but changed it earlier this week to “BTFD,” an acronym for the phrase “buy the dip” with an expletive.
But Valkyrie reverted back to the BTF ticker in a filing Wednesday afternoon, potentially due to objections from regulators over what the phrase BTFD stands for.
VanEck managed to secure an effective date for its VanEck Bitcoin Strategy ETF (XBTF) this Saturday as well, according to a filing this morning.
Both BTFD and XBTF gain exposure to bitcoin prices solely through futures, while BITO reserves the right to use fund assets to buy into foreign vehicles that directly hold bitcoin. However, XBTF will charge an expense ratio of 0.65%, undercutting both ProShares’ and Valkyrie’s 0.95% expense ratio.
ETF Store President Nate Geraci said BITO has reaped the benefits of its first-mover advantage in providing bitcoin price exposure in a traditional brokerage account, but that pent-up demand and Wednesday’s new record-high bitcoin price points to more market share up for grabs.
“The overwhelming demand for BITO at least gives some confidence to the second and third and fourth mover, that there's a big enough market there to take advantage of,” he said.
Spot ETFs Approach Decision Day
The SEC is set to make a final approval or denial for VanEck’s Bitcoin Trust on Nov. 14, marking the next time the regulator will have to say whether it’s in favor of a physically held bitcoin ETF after years of denials.
Geraci doesn’t expect the track record of three bitcoin futures-based ETFs to have much effect on the SEC’s decision on a physical fund, partially because the availability of the Grayscale Bitcoin Trust and foreign direct-hold bitcoin vehicles haven’t swayed the agency toward approval so far.