In its latest presentation of futures-based exchange-traded funds (ETFs), Valkyrie Funds uses one of the financial community's popular Twitter memes, known as a "fintwit," to grab attention and interest.
On May 16, the investment firm sent a new application for a Bitcoin (BTC) Futures-based ETF that will trade on the Nasdaq under the ticker symbol "BTFD."
Both of Valkyrie's Bitcoin-focused funds have no direct exposure to Bitcoin itself; instead, they invest in bitcoin futures is listed on the Chicago Mercantile Exchange. Bitcoin futures are financial contracts that allow investors to speculate on the future price movements of Bitcoin. These contracts bind the buyer to buy or the seller to sell Bitcoin at a predetermined price on a specified future date. Unlike Bitcoin trading, which involves owning and holding the digital asset itself, Bitcoin futures allow traders to speculate on the price of Bitcoin without directly owning it.
Initially thought for the first fund, the suggestive ticker was reportedly modified by the firm in October 2021.
In contrast to the firm's existing block trading facility (BTF) fund, this newly proposed fund will offer leverage, allowing speculators to increase their exposure to the dominant cryptocurrency. A BTF is an actively managed ETF available through Nasdaq that invests primarily in Bitcoin futures contracts.
Up to this point, the market has seen the introduction of four different ETFs based on Bitcoin futures. The first, ProShares Bitcoin Futures ETF, was Iannounced in October 2021.
So far, the United States Securities and Exchange Commission (SEC) has denied several attempts introduce Bitcoin Spot ETFs or funds that provide direct exposure to the dominant cryptocurrency, citing concerns about potential market manipulation in the Bitcoin market.
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Digital asset manager Grayscale is currently involved in a protracted legal dispute with the SEC as it seeks to transform its Grayscale Bitcoin Trust into a Bitcoin spot ETF. The investment firm criticized the SEC's decision to authorize futures-based ETFs instead of spot ETFs, deeming it "illogical."
In March, the judges preside over the dispute between the two entities in the United States Court of Appeals for the District of Columbia Circuit stated the view that the SEC "must provide a thorough explanation" regarding its understanding of the connection between Bitcoin futures and the Bitcoin spot price.
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