SkyBridge Capital, a New York-based investment firm, has officially become the latest firm to file for the right to launch a Bitcoin exchange-traded fund (ETF). The firm submitted its filing to the United States Securities and Exchange Commission (SEC) on March 19th.
According to a report by CoinTelegraph, SkyBridge filed for the ETF in partnership with First Trust Advisors. First Trust will act as the fund’s primary advisor, while SkyBridge will serve as its sub-advisor.
If approved, the fund will be listed on the New York Stock Exchange, Arca. A ticker symbol has not yet been decided for the fund.
A Wave of Firms Have Been Trying for Bitcoin ETFs since the Start of 2021
Skybridge’s application is the latest in a number of several Bitcoin ETF applications that have been filed with the US SEC since the start of the year.
Before Skybridge, a firm known as WisdomTree submitted its latest Bitcoin ETF application on March 11th. Previously, in 2020, WisdomTree applied for the right to launch an ETF that would invest up to 5% of its capital into Bitcoin futures contracts; the rest of the fund’s capital would have been devoted to energy, agriculture and metals.
In February, US investment bank Morgan Stanley submitted a Bitcoin ETF filing in partnership with NYDIG, a financial services firm focused on cryptocurrency. Morgan Stanley’s Bitcoin ETF would have only been available to investors who hold at least $2 million in assets with the bank.
In January, VanEck and Valkyrie Digital Assets also filed for Bitcoin ETFs. VanEck, which has issued a number of exchange-traded products, has been trying for a Bitcoin ETF for several years.
Previously, in 2019, a wave of financial firms attempted to file for an ETF with the United States SEC. However, their efforts were unilaterally denied by the Commission.
Why are all of these firms trying for Bitcoin ETFs now? In late 2019, Jake Chervinsky, a general counsel lawyer at Compound Finance, said on Twitter that it was unlikely that the industry could have expected to see a Bitcoin ETF while Jay Clayton, the former chair of the SEC, was in office.
“At this point, it’s reasonable to assume that Jay Clayton’s SEC will never approve a bitcoin ETF,” he wrote. However, Clayton stepped down as the Chairman of the SEC in December 2020.
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At this point, it’s reasonable to assume that Jay Clayton’s SEC will never approve a bitcoin ETF.
His term ends on June 5, 2021, but could go another 18 months longer.
Usually we’d see new ETF proposals filed immediately after rejection, but it might be time to take a year off.
— Jake Chervinsky (@jchervinsky) October 10, 2019
Diogo Monica: “I Wouldn’t Be Surprised If We Get an ETF in the United States at Some Point Soon.”
In a recent interview with Finance Magnates and Anchorage President and Co-Founder, Diogo Monica said that at the time, the necessary infrastructure for supporting an ETF may not have been in place.
“The other thing that we have to think about is that today’s market is very different from the market at the time that many proposed Bitcoin ETFs were being rejected,” he said.
Indeed, there were a number of reasons why ETFs may not have viable in early 2019. At the time, the crypto industry lacked the necessary institutional infrastructure, including “liquidity, regulatory clarity and the number of platforms in place.”
Now, “the space is in a very different level of maturity,” he told Finance Magnates. “That is one of the things that it seems like regulators were waiting for, and I think we’re there now. I wouldn’t be surprised if we get an ETF in the United States at some point soon.”
Finance Magnates previously reported that the lack of a Bitcoin ETF in the United States has led institutional investors to seek other regulated ways of investing in BTC. For example, Fundstrat Vice President of digital asset strategy, Leeor Shimron, told CNBC that: “until a Bitcoin ETF is approved, investors may view public mining companies as one of the only ways to get exposure to Bitcoin.” Indeed, investments in public mining companies have outperformed Bitcoin by 455% over the past 12 months.