A proposed exchange-traded fund (ETF) will invest the majority of its capital in companies that have bitcoin on their balance sheets or related to cryptocurrencies.
Valkyrie Digital Assets applied for a Bitcoin ETF, form N1-A for Valkyrie ETF with the US Securities and Exchange Commission on Friday in partnership with KKM Financial, which is acting as an investment advisor. for the fund, and the SEI Institutional Asset Manager, acting as the distributor of the fund.
“The Fund invests primarily in the securities of innovative balance-sheet operating companies, companies waiting to invest directly or indirectly in, trade or come into contact with bitcoin, or operate in the system. the bitcoin ecosystem, ”wrote Valkyrie in the application.
Valkyrie has defined the Bitcoin ecosystem as the Bitcoin network and “bitcoin exchange platforms, bitcoin miners, bitcoin custodians, digital wallet providers, bitcoin payment support companies, and bitcoin providers. providing other technology, equipment or services for companies operating in the Bitcoin ecosystem ”.
Similarly, last week JPMorgan Chase published a filing detailing an upcoming debt instrument linked to crypto-related companies such as MicroStrategy, Square, Riot Blockchain, and chipmaker Nvidia.
If the ETF proposal becomes an investment vehicle before the US Securities and Exchange Commission approves a Bitcoin ETF, it could acquire the same type of capital flow that Canadian Bitcoin ETFs have seen a few days after being Approved by the Ontario Securities Commission.
Earlier this year, analysts noted that MicroStrategy’s stock was being treated as a bitcoin ETF proxy because the stock rose in price alongside bitcoin.
The investment vehicles that help funds buy bitcoins for companies are not allowed to add bitcoins to their balance sheets, said Jeff Kilburg, CEO of KKM Financial.
“This is a very complex, sophisticated approach for a number of multinational corporations whose policies and procedures currently do not include the possibility of owning cryptocurrencies,” said Kilburg. “It’s a really tough place to identify not only current companies (that have invested in bitcoin) but also to find companies that are looking to put this on their balance sheets.”