Alternative Investments/Digital Assets: Valkyrie Joins The Race To Launch A Bitcoin ETF
After VanEck, Valkyrie is the second firm to apply to the SEC for a bitcoin ETF.
Valkyrie Digital Assets LLC, a wholly-owned subsidiary of Valkyrie Investments Inc., has thrown its hat in the ring to obtain SEC approval for the launch of a bitcoin ETF. On Friday, Valkyrie submitted its application to the regulator for the “Valkyrie Bitcoin Fund,” to be listed on the New York Stock Exchange. (Decrypt)
The Coinbase Custody Trust Company would act as the custodian for the new ETF.
The benefits from an ETF
Valkyrie’s application comes in the wake of bitcoin’s stupendous performance during 2020, where it returned about 301%.
Both retail and institutions participated in the massive rally, which bestowed upon bitcoin the distinction of being one of the best performing investments in 2020.
Asset managers anticipate huge inflows into an ETF listed on U.S. exchanges. This is likely particularly from institutions, which would be able to have unfettered access to the cryptocurrency.
For retail investors, the ETF would be an inexpensive, tax-efficient, and secure way to hold bitcoin. They would not suffer the risks of keeping it in personal custody.
The new investment flowing into crypto through the ETF would bolster bitcoin’s adoption, thereby expanding its reach and usage. That, in turn, could lead to another rally in its prices.
Unfortunately, the SEC has rejected all previous applications for a bitcoin ETF, fearing price manipulation and risks to the financial well-being of retail investors.
With the new administration, there is new hope
The erstwhile Chairman, Jay Clayton, has departed the SEC, and funds are hoping that the new incumbent would have a more positive view of bitcoin and its ETF.
The crypto world has taken a dim view of Clayton’s legal action against Ripple in the dying days of his office. The resulting crash in the value of the XRP crypto has damaged the fortunes of investors across the globe.
However, there is hope that Biden’s choices for SEC head (Allison Herren Lee as acting chair; Gary Gensler nominated as the next SEC chair) may see the ETF issue in a new and favorable light.
Related Story: Fresh Bid By VanEck For A Bitcoin ETF
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