Alternative Investments/Digital: NYDIG Joins The Queue For Bitcoin ETF Approval

February 17, 2021 | Digital Assets, News
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New York Digital Investment Group (NYDIG) wants to list the ETF, if approved, on the NYSE.

NYDIG, a subsidiary of Stone Ridge Asset Management, filed an application for a bitcoin ETF with the SEC on Tuesday. With the change in administration at the SEC, NYDIG is eyeing better chances of the regulator finally approving a bitcoin ETF. It joins VanEck and Valkyrie, previous ETF applicants at the SEC. The new ETF proposed by NYDIG is dubbed the “NYDIG Bitcoin ETF.” (bitcoinmagazine.com)

In its filing, NYDIG has named Morgan Stanley (NYSE: MS) as the initial authorized participant for the ETF. While the ETF will list on the New York Stock Exchange, the NYDIG Trust Company would undertake custodial services.

Regulator more lenient this time around?

SEC commissioner Hester Peirce said recently that the US markets were ready for exchange-traded products tied to bitcoin. Peirce is fondly also referred to as “Crypto Mom.”

Moreover, on Friday, in Canada, the Ontario Securities Commission (OSC) cleared for launching the Purpose Bitcoin ETF. The ETF is said to be the first in the world to invest directly in physically-settled bitcoin.

Within just days, on Tuesday, the OSC approved the second-ever bitcoin ETF from Evolve Funds.

With Canadian regulators showing the way forward, the U.S. regulators may be inclined more favorably towards a bitcoin ETF in their own country.

Advantages of an ETF

Analysts expect an approved and regulated bitcoin ETF to be a huge booster for crypto adoption and investments. Retail and institutional investors gain price exposure to bitcoin without the cumbersome procedures (and risk) of holding bitcoin in physical custody.

Most investors adopt a different route – investing in bitcoin trusts such as Grayscale’s Bitcoin Trust – albeit on payment of a premium.

On the other hand, an ETF, such as from NYDIG, would be tradable just like shares in companies such as Apple or Google.

“Now that the OSC has said that if a product is well constructed enough the crypto market is sufficiently mature for these types of financial products, the industry’s attention inevitably turns south of the border to the US,” said Sui Chung, CEO of CF Benchmarks to Business Insider. “Will the SEC finally decide that the time is right for a Bitcoin ETF?”

Related Story:   Digital Assets: The SEC Thaws; Approves Bitcoin Futures Fund

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