Asset Manager obtains SEC approval to create a new Bitcoin futures fund
The New York Digital Investment Group (NYDIG) obtained approval from the United States Securities and Exchange Commission (SEC) to offer institutional investors shares of a new fund focused on bitcoin futures.
According to a presentation published in a SEC database on Monday, the NYDIG Bitcoin Strategy Fund, a portfolio fund in the Stone Ridge Trust VI, will invest in cash-settled bitcoin futures contracts traded on exchanges registered with the Commission on Commodity Futures Trading (CFTC). The fund does not intend to invest in bitcoin directly or in any other cryptocurrency.
“The Fund will seek to purchase an amount of Bitcoin futures so that the total Bitcoin value underlying the Bitcoin futures held by the Fund is as close to 100% of the Fund’s net assets (the” Target Exposure “), as it is reasonably possible to achieve, “said the presentation.
He warned that “it cannot be guaranteed that the Fund will be able to achieve or maintain the objective Exposure.”
NYDIG, which received a BitLicense and a limited-purpose trust letter from the New York Department of Financial Services last year, is seeking to raise $ 25 million through the fund.
At the time of publication, CME is the only exchange (Exchange) that offers bitcoin futures contracts settled in cash in the US. UU. (While Bakkt intends to offer bitcoin futures settled in cash starting next week, they will be marketed at ICE Singapore.)
The SEC has long hated approving certain products of funds that touch cryptocurrencies: publicly traded funds (ETFs) as the main example. However, Monday’s approval may indicate a slight change in its position.
In fact, Dalia Blass, director of the SEC Investment Management Division, seemed to refer to the fund in a speech earlier this week, calling it “an excellent example” of the industry that engages with the agency in new types of products.
He added the following: “Last year, I issued a public letter asking the fund industry to enter into a dialogue on investor protection and the substantive issues presented by such investments.”
These issues included valuation, custody, liquidity, arbitration efficiency and potential manipulation. The letter asked the funds to find ways to answer these questions.
“As a result of this commitment, we are at the point that a closed interval fund registered with a bitcoin futures strategy is preparing for its launch,” he said. “To get to this point, the fund responded first to each of the problems identified in the staff letter.”
While Blass did not identify the NYDIG fund by name, it said it would invest in bitcoin futures liquidated in cash, which means it does not face crypto custody issues, and would value its holdings using the settlement price in a futures exchange registered in CFTC
She promoted other aspects of the fund as examples of how she addresses her concerns expressed above.
SEC commissioner Hester Peirce went to Twitter to praise the approval, calling it “a bit of progress.”
NYDIG declined to comment on the fund through its spokesperson.
The finance industry is gradually getting involved in blockchain-bitcoin technology, this revolutionary way of generating wealth is relatively new, investors will be able at any given moment to boost this new way of investing in bitcoin futures funds.
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