Volt’s bitcoin ETF that invests in companies holding and deriving profits from BTC has been approved by the SEC. The ETF does not directly invest in the cryptocurrency, but indirectly provides exposure to the market.
The United States Securities and Exchange Commission (SEC) has approved a Volt ETF — Volt Crypto Industry Revolution and Tech ETF (BTCR) — that invests in tech companies with exposure to bitcoin and supporting infrastructure. This marks a huge step forward for the crypto market, which has so far not received any approvals for ETFs with direct exposure to bitcoin. The fund will invest in both U.S. and foreign companies in the space.
The prospectus defines such companies as Bitcoin Industry Revolution Companies. To meet the requirements for investment, these companies must hold a majority of their net assets in bitcoin over the past 12 months. Additionally, they can also be those that derive a majority of their revenue or profits from mining, lending, transacting in bitcoin, or manufacturing bitcoin mining equipment, again as determined from their filings in the past 12 months.
However, these will not include Canadian ETFs, private funds, and Grayscale’s bitcoin trust. Like other ETFs that have been filed in recent months, it will not directly invest in bitcoin or other cryptocurrencies.
Volt first applied for the ETF to be approved in Jun. 2021. The ETF is similar to one filed by BitWise.
The SEC has been cagey about approving ETFs, which is worried that there aren’t enough measures to protect investors. SEC Chair Gary Gensler, who has shown support for bitcoin futures-based ETFs, says that a framework for regulation must precede ETF approvals. For that reason, there are several ETFs, many of which aim for direct exposure to bitcoin, sitting on top of the SEC’s desk.
Galaxy Digital releases crypto ETFs in collaboration with Invesco
Michael Novogratz’s Galaxy Digital, after having formed a partnership with investment management company Invesco, has also seen success with the launch of two crypto ETFs. Bloomberg reported that the Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) began trading on Cboe global markets on Oct 7.
Like the Volt ETF, the Invesco Alerian Galaxy Crypto Economy ETF invests in companies that derive their profit from cryptocurrency-related activities like mining. The second ETF also invests in companies that work on blockchain-related technologies.
Cryptocurrency proponents have argued that ETFs as an investment vehicle would help bring some order to the market. With a safer way to invest in bitcoin, as opposed to exchanges that are still processing compliance orders, new investors will be better protected.
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