At the end of January, Valkyrie Digital Assets, a Texas-based company, applied to the U.S. Securities and Exchange Commission (SEC) for the registration of the “Valkyrie Bitcoin Trust” Exchange Traded Fund (ETF). This month, the cryptocurrency investment manager announced that it has submitted an ETF prospectus to the SEC, which is based on a company that holds the leading cryptocurrency asset, Bitcoin.
Valkyrie Innovation Balance Sheet ETF
The value of Bitcoin (BTC) has increased a lot in 2021, and two months ago, Valkyrie Digital Assets joined other companies to launch a Bitcoin ETF in the United States. Efforts to approve Bitcoin ETFs in the United States are real, but the three recent approvals of Canadian ETFs give people hope. Now, according to Valkyrie Digital Assets’ recent registration statement, the company plans to launch another ETF based on the company that holds its Bitcoin (BTC).
The ETF is very similar to the prospectus submitted by the financial giant JP Morgan Chase to the US Securities and Exchange Commission (SEC). JP Morgan Chase is also a basket of companies exposed to Bitcoin (BTC). However, Valkyrie’s ETF registration documents did not mention any company that it plans to go public. If approved, the fund will be called the “Valkyrie Innovation Balance Sheet ETF.”
“The fund is an actively managed exchange traded fund that mainly invests in the securities of operating companies with innovative balance sheets. The investment consultant of the fund KKM Financial LLC (hereinafter referred to as the “adviser”) believes that this is an operating company,” Directly or indirectly invest, trade or otherwise access Bitcoin or operate in the Bitcoin ecosystem,” Valkyrie ETF filing stated.
Valkyrie said that the company can also invest in “bitcoin trading platforms, bitcoin miners, bitcoin custodians, digital wallet providers, companies that facilitate bitcoin payments, and provide other technologies to companies operating in the bitcoin ecosystem, Equipment or service company.”
You can also consider a company like Microstrategy that holds Bitcoin (BTC) on its balance sheet. The Valkyrie prospectus added:
Funds can invest in companies that directly hold Bitcoin or invest in any part of their assets. The fund can invest in companies of any market value. As of the date of this prospectus, the fund expects to invest a significant portion (ie, more than 25%) of its assets in the securities of companies in the information technology sector.
Despite regulatory uncertainty in the U.S., there is still strong demand for cryptocurrency ETFs
When the “Valkyrie Innovative Balance Sheet ETF” appeared, Bitcoin (BTC) touched another historical price (ATH) on March 13, reaching $61,782 per unit. In addition, 42 companies holding BTC now hold approximately $82 billion in capital value. Of course, like most SEC prospectuses, the Valkyrie registration also mentions Bitcoin and blockchain risks.
“The technology that supports the Bitcoin ecosystem is new. Therefore, before the ecosystem matures, the risks associated with owning or operating in the Bitcoin ecosystem may not be fully understood.
What do you think of Valkyrie’s latest ETF documents investing in companies with Bitcoin exposure? Let us know your thoughts on this topic in the comments section below.
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