Crypto Upstart Reality Shares Files Semi Bitcoin ETF To The SEC
Reality Shares’ Product To Have 15% BTC At Maximum
That’s right folks, yet another contender has entered the Bitcoin exchange-traded fund (ETF) fray. This time its Reality Shares, a blockchain-centric investment services provider based in California that is headed by chief executive Eric Ervin.
According to The Block, who broke the news on the subject matter, the proposal, which pertains to NYSE Arca, recently filed to the U.S. Securities and Exchange Commission (SEC) isn’t like its brethren. In fact, it isn’t really a full-Bitcoin fund, as a maximum of 15% of the fund’s assets will be allocated to BTC, through the CBOE and CME futures to be exact, if the product goes live.
Reality Shares is planning for the remaining assets to be allocated to sovereign debt instruments denominated in fiat currencies like the British Pound, Japanese Yen, Swiss Francs, along with money market mutual funds. Ervin explained his reasoning for this decision, which would give common Joes and Jill adequate exposure to the flagship cryptocurrency, by stating:
The SEC doesn’t want to approve a full blown crypto ETF but this limits exposure to 15%.
While this move is welcome, especially considering the lack of U.S.-regulated, easily-accessible crypto-related investment offerings, some may be disconcerted by the fact that Reality Shares may decide to stave away from allocating their funds to physical BTC. This is due to the fact that CBOE’s and CME’s Bitcoin offerings are currently cash-settled, thus making the California investment upstart’s potential Bitcoin allocation paper, not physical.
Bitcoin ETF Hype Continues
The filing of Reality Shares’ proposed vehicle comes amid a continued hype surrounding Bitcoin ETFs and products of similar caliber.
Interestingly, the aforementioned proposal is the second semi-Bitcoin ETF to be filed in a month’s time.
Per MarketWatch, Wilshire Phoenix, a New York-headquartered investment management group, submitted an S-1 filing with the SEC last month. The filing purportedly pertains to a crypto-backed product, interestingly named the United States Bitcoin and Treasury Investment Trust. Unlike suggested vehicles from VanEck and its partners, Wilshire’s trust will hold positions in not only BTC but short-term U.S. Treasury bills and American dollars too.
The SEC-filed document accentuated the fact that the trust isn’t meant to directly emulate a capital allocation towards Bitcoin. Instead, Wilshire sees the instrument as a way for prospective investors to gain minimal, but sufficient exposure to the leading cryptocurrency. The American investment firm added that the vehicle’s divergent nature would decrease volatility, while also minimizing the shortcomings of purchasing, securing, and selling Bitcoin.
While all this is well and good, strides have been made in the full-Bitcoin fund scene too. As reported by Ethereum World News previously, San Francisco-based Bitwise Asset Management revealed an ETF that would track its in-house Bitcoin Total Return Index, which purportedly “captures the full value of an investment in BTC.”
The CBOE, VanEck, and SolidX also resubmitted its joint proposal to the SEC after months of tumult.
And the proposals’ prospects have begun to look up, especially as Hester Peirce, a commissioner at the financial regulator, has expressed kindness and leniency towards the cryptosphere. But will she be able to convince her fellow commissioners?
Title Image Courtesy of Bruno Van Der Kraan Via Unsplash