SEC approves crypto stock ETF- Volt Equity’s Crypto Stock ETF, Is a Bitcoin ETF next?

• For the first time, the SEC approved Volt Bitcoin ETF on the New York Stock Exchange under the ticker “BTCR.”
• The Fund will invest in companies supporting Bitcoin and the blockchain industry. 

For the first time, the US Securities and Exchange Commission (SEC) has approved a Volt Bitcoin ETF – Volt Crypto Industry Revolution and Tech ETF with the ticker “BTCR.”

In an SEC prospectus published on the 1st of October, the Commission said the Fund would not invest directly in Bitcoin. Instead, Volt Bitcoin ETF will invest in companies supporting Bitcoin and the Bitcoin blockchain industry. 

This is indeed a huge step in the milestone of crypto trading in the US. The approval came amid the increasing demand from investors for heightened recognition in the mainstream trading system. Also, there has not been any approval for ETFs with direct exposure to Bitcoin in the US. The SEC has been reluctant to approve ETFs, claiming that there is not enough protection for investors. The chairman of the Commission, Gary Gensler,  emphasized on the need for a framework for ETF regulation before there would be an approval.  

Volt Bitcoin ETF

The newly approved Volt ETF will invest in the US and also in foreign companies in the space, which the prospectus defined as Bitcoin Industry Revolution Companies.

According to the prospectus, Bitcoin Industry Revolution Companies are companies that hold a large percentage of their net assets over the past year in BTC. Also, these companies are firms with a majority of revenue in the last twelve months directly derived from mining, lending, transactions in Bitcoin, or manufacturing Bitcoin mining equipment. However, Canadian ETFs, private funds, or GBTC are not under these companies. 

Under normal circumstances, the Volt Bitcoin ETF will invest a minimum of 80 percent of its net assets Bitcoin Industry Revolution Companies and Technology Companies. The percentage will also go into options on the selected companies, and ETFs with exposure to those companies. Concerning the remaining percentage of the net asset, the SEC prospectus explained:

The remainder of the Fund’s net assets used to satisfy the 80% test forth above will be invested in Technology Companies, and at least 15% of the Fund’s net assets will be in Technology Companies.

Technology companies, according to the SEC report, are companies that generate at least 50 percent of their revenue from technology hardware, software, and/or products that leverage self-developed processing chips or AI chips. Furthermore, the Fund may direct up to 20 percent of its portfolio to gain broad equity market exposure. 

Galaxy Digital and Investco launches two crypto ETFs

Last month, investment management company Invesco partnered with Galaxy Digital on crypto ETFs. The partnership rolled out a line of crypto-backed ETFs, and they have jointly launched two of the Funds. They are the Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC). 

With the rampant ransomware coupled with other cybercrimes, the Biden administration is considering a wide-ranging executive order to regulate cryptocurrencies. Reliable sources revealed that the proposed directive would charge authorities to offer suggestions on economic innovation and financial regulation.