Lead: Yet another firm has filed for an ETF with the U.S Securities and Exchange Commission (SEC), this time Reality Shares ETF Trust who, on February 11, 2019, filed for an ETF that would include bitcoin futures and sovereign debt instruments.
Another Hat in the Ring
As the deadline for the SEC to make a decision regarding the long-pursued ETF approaches, another firm has thrown its hat into the ring, this time Reality Shares ETF Trust, who filed for an ETF on February 11, 2019.
Reality Shares ETF Trust, which is a subsidiary of Blockforce Capital, proposes that their ETF would contain both sovereign debt instruments as well as bitcoin futures. The ETF, should it receive approval, will be listed on NYSC Accra and is designed to:
“provide investment exposure to global currencies, both fiat and virtual currencies, that have been widely adopted for use (e.g., as store-of-value, international remittance, foreign-exchange trading) throughout the world.”
The investments in question will be done through a subsidiary that is registered in the Cayman Islands and the investment would be in the cash-settled BTC futures which are traded on CBOE Futures Exchange and the Chicago Mercantile Exchange, though it is mentioned that they could invest in futures on other exchanges at some time in the future.
The futures will be valued at their cash settlement values which are published at the end of each trading day. However, direct investments in bitcoin will not be made. The document writes:
“The Fund may gain most of its exposure to Bitcoin Futures through its investment in the Subsidiary, which invests in Bitcoin Futures. To the extent the Fund invests in such instruments directly, it will seek to restrict its income from such instruments to a maximum of 10 percent of its gross income to comply with certain qualifying income tests necessary for the Fund to qualify as a regulated investment company,”
Besides bitcoin futures, the ETF will also focus attention on sovereign debt instruments. The instruments were described in the filling as “high-quality, short-term sovereign debt instruments listed for trading on U.S. exchanges and denominated in U.S. dollar, euro, British pounds sterling, Japanese yen and Swiss francs.”
While the journey to ETF approval has seen yet another candidate, there are still firms such as VanEck, who are still waiting on a decision. While speculation is as high as ever, the final decision from the SEC will not be known until February 27, 2019.