The company clarified that the ETF would not invest in digital assets directly or indirectly. The ETF would apply “replication”, with which they intend to achieve the investment goal.
US digital asset manager Grayscale filed along with the US Securities and Exchange Commission (SEC) an application for a new exchange-traded fund (ETF).
The plan is to track the actions of companies linked to bitcoin (BTC) and other cryptocurrencies in an alternative for investors to expose themselves to the current market. According to the preliminary prospectus, Grayscale Investments LLC applied last Friday, November 5, to stay at the frontline in the cryptocurrency industry.
The current product, named the Grayscale Future of Finance ETF (GFOF), will get entrusted with tracking the intersection of finances, technology, and digital assets. In detail, Grayscale’s new product intends to follow the actions of companies closely related to cryptocurrencies.
Indexing to Track Returns
According to the company, the new ETF would apply a passive management approach to track performance, fees, and expenses, focused on an index called the Bloomberg Grayscale Future of Finance Index. They highlight that this index will get built to follow the performance of companies classified as providers of exposure to Future of Finance.
The future of Finance would also include asset managers, exchanges, brokerages and wealth managers, and those companies that provide technological solutions, such as companies that bring technology through data processing and transactions.
And finally, there are those digital asset infrastructures, such as companies directly working with energy and mining activities. All companies included in the index, according to Grayscale, must have a market capitalization of $ 100 million to get considered by the ETF.
However, the Fund may use a “representative sampling” strategy, which means it could invest in a sample of Index securities whose risk, return, and other features are similar.
A Never-Ending Pressure
The arrival of this new request from Grayscale is a sign that the pressure on the US regulator to approve financial products related to cryptocurrencies does not stop. Grayscale currently counts on a Bitcoin Trust fund that houses the amount of BTC (654,600, according to Buy Bitcoin Worldwide),
This new documentation now includes many other companies still awaiting a response from the SEC, which has only approved three bitcoin futures ETFs, rejecting leveraged and spot. There is a new request made within the SEC. Cryptocurrency financial services platform BlockFi had advanced documentation requesting approval of an exchange-traded bitcoin spot fund (ETF).
There is a lot of pressure on the president of the SEC, Gary Gensler. US Congressmen have advocated in favor of bitcoin ETFs without implying an acceptance from the official.
Grayscale currently counts on $ 59.2 billion in assets under management, leading the Bitcoin Trust to control the majority, accounting for 71% of the total amount. The remainder, about $ 14.7 billion, or 25%, is under the control of the Ethereum Trust.
By: Jenson Nuñez
