Galaxy Digital, an investment firm headed by Mike Novogratz, has applied to the SEC to approve a new ETF based on Bitcoin futures.
Compared to other ETF products that the Securities and Exchange Commission has yet to rule on, this time, the exchange-traded fund does not invest directly in Bitcoin but in Bitcoin futures. In the United States, most of the traffic volume of futures on Bitcoin is handled by the CME (Chicago Mercantile Exchange).
The choice of Mike Novogratz is not random. The CEO of Galaxy Digital practically “exploited” recent statements by SEC Chairman Gary Gensler, who said that the SEC would be more inclined to approve an ETF on Bitcoin not directly exposed to BTC but futures.
Galaxy had already applied for approval for another ETF, this one directly exposed to BTC, but did not want to miss this opportunity.
The SEC’s delay in approving Bitcoin ETFs and the turn to futures
An ETF based on Bitcoin futures could mitigate risk for investors by not being directly linked to BTC. In fact, at the moment, the SEC has been slow to approve ETFs precisely because of Bitcoin’s high volatility, which makes it an extremely risky product for investors.
However, in other markets worldwide, Bitcoin ETFs are already a reality, for example, in Canada and Brazil. The U.S., in this respect, is lagging far behind. It will have to be seen if Galaxy Digital’s product will meet the SEC’s requirements and concerns.
Certainly, an ETF on Bitcoin in the U.S. would open the industry’s doors wide to institutional investors, who are increasingly interested in Bitcoin but looking for investment products more similar to those in institutional markets. An eventual approval could contribute to the further growth of the price of Bitcoin, which already now, despite the retreat to $44,000, strong precisely because of the presence of institutional investors, is aiming straight at breaking through the $50,000 mark again.