Valkyrie’s Bitcoin Futures ETF Inspired By TradFi Memes

Key Points:

• Valkyrie files for a Bitcoin futures-based ETF on the Nasdaq with the ticker symbol “BTFD”.
• Both of Valkyrie’s Bitcoin-centric funds do not possess direct exposure to Bitcoin itself; instead, they rely on Bitcoin futures traded on the CME.
• The newly proposed fund will offer leverage, allowing speculators to increase their exposure to the dominant cryptocurrency.

Valkyrie’s latest exchange-traded funds (ETF) filing, which proposes a Bitcoin futures-based ETF, has interestingly made use of a popular meme from the financial Twitter community called “fintwit.”

By utilizing this meme, the investment firm hopes to capture the attention and interest of potential investors.

The application, which was submitted on May 16 and can be found here, aims to have the ETF listed on the Nasdaq with the ticker symbol “BTFD.” This is an interesting move by Valkyrie as both of their Bitcoin-centric funds do not have direct exposure to Bitcoin itself. Instead, they rely on Bitcoin futures traded on the Chicago Mercantile Exchange (CME). These financial contracts permit investors to speculate on the future price movements of Bitcoin, and obligate the buyer or seller to purchase or sell Bitcoin at a predetermined price on a specific future date.

It is important to note that unlike trading actual BTC, which involves owning and holding the digital asset itself, Bitcoin futures enable traders to speculate on the price of Bitcoin without directly owning it.

Initially, the suggestive ticker “BTFD” was meant for the first fund. However, it was modified by the firm in October 2021. As opposed to the firm’s existing block trading facility (BTF) fund, this newly proposed fund will offer leverage. This will permit speculators to increase their exposure to the dominant cryptocurrency. BTF is an actively managed ETF available through Nasdaq that invests primarily in bitcoin futures contracts.

It is worth mentioning that the market has seen the introduction of four distinct Bitcoin futures-based ETFs so far. The first one, ProShares BTC Futures ETF, was launched in October 2021. However, the Securities and Exchange Commission (SEC) has denied several attempts to introduce Bitcoin spot ETFs or funds that provide direct exposure to the dominant cryptocurrency. The SEC has cited concerns regarding potential market manipulation in the Bitcoin market as the reason for these denials.

Grayscale, a digital asset manager, is currently involved in a prolonged legal dispute with the SEC as it seeks to transform its struggling Grayscale Bitcoin Trust product (GBTC) into a spot Bitcoin ETF. The investment firm criticized the Commission’s decision to authorize futures-based ETFs instead of spot ETFs, deeming it “illogical.”

In March, judges presiding over the dispute between the two entities in the United States (U.S.) Court of Appeals for the D.C. Circuit expressed their view that the SEC “must provide a thorough explanation” regarding its understanding of the connection between Bitcoin futures and the spot price of Bitcoin.

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Annie

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