Galaxy Digital applies to launch a Bitcoin-futures ETF under the 1940 Act

The cryptocurrency merchant bank Galaxy Digital, led by Mike Novogratz, filed with the SEC to launch ETF based on Bitcoin futures under the Investment Company Act of 1940.

Galaxy just filed for a Bitcoin Futures ETF registered under 1940 Act and that will ONLY invest in futures, which is as Gensler-ready as you can get. This futures filing #5. pic.twitter.com/gMLH98mxS5

— Eric Balchunas (@EricBalchunas) August 17, 2021

In April Galaxy Digital filed an application, which was based on the provisions of the Securities Act of 1933.

Earlier, SEC chair Gary Gensler said that the Investment Company Act of 1940 provides for stronger investor protections. He stressed that a fund meeting the regulator’s requirements could be approved.

Galaxy Bitcoin Strategy ETF is based exclusively on Bitcoin futures, as are similar instruments from Wilshire Phoenix and VanEck. The structure does not involve investments in funds based on the first cryptocurrency, unlike Invesco and ProShares.

Bloomberg editor Erik Balchunas noted that the intrigue lies in which of the two ETF types the SEC will approve. He stressed that this will occur at a time when the regulator’s head, Gary Gensler, makes such a decision.

Background on the issue of whether futures-only vs futures and other funds matters or not. https://t.co/sxAF2Aw6x0

— Eric Balchunas (@EricBalchunas) August 17, 2021

In February Canada registered the first Bitcoin ETF in North America. The regulator also approved the launch of CI Galaxy Bitcoin ETF — an exchange-traded fund from CI Global Asset Management and Galaxy Digital.

Earlier, Mike Novogratz predicted approval by the SEC of a bitcoin ETF in 2021.

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