GlobalX has applied for a Bitcoin ETF in partnership with Coindesk Indices
Date: 2023-07-24 Author: Karina Ziganova Categories: BLOCKCHAIN, CRYPTO PAYMENTS
Over the past month, several traditional financial institutions have shown interest in cryptocurrencies by applying to launch a Bitcoin ETF. The trend continued in July, with the GlobalX ETF petitioning the SEC to create a Bitcoin Trend Strategy ETF in partnership with Coindesk Indices.
Bloomberg journalist James Seyffart reported this on July 21, noting that the potential launch date of the tool will be in early March. The ETF will use trend-following indicators to dynamically and systematically distribute across multiple Bitcoin (BTC) futures contracts traded on an exchange.
The SEC is likely to approve GlobalX's application for a bitcoin ETF
Seyffart suggested that the U.S. Securities and Exchange Commission would approve the application because it is not a spot bitcoin ETF, which the financial regulator has consistently rejected.
"The only possible option in which it will not be approved de facto is if the SEC delists all previously approved bitcoin futures ETFs," he added.
The description of the index strategy states that the distribution of funds is based on the value of the Bitcoin Trend Indicator. It is a dynamic quantitative metric developed and administered by CoinDesk Indices, Inc. Its purpose is to "determine the presence, direction, and strength of the BTC price trend." Based on this signal, the underlying index will increase or decrease the share in bitcoin futures accordingly.
Institutionalists are again showing interest in cryptocurrencies
In June, the US regulator was hit by a real flurry of applications for ETFs. Institutional players have renewed interest in cryptocurrencies after investment giant BlackRock announced its intention to launch a spot bitcoin ETF. WisdomTree, VanEck, Invesco and a number of other companies have followed the world's largest asset manager and done the same.
On June 30, Wall Street Journal sources reported that the Commission rejected the documents, calling them "not clear and comprehensive enough." SEC officials said the companies did not provide enough information on how the data would be shared. In addition, none of the applications met standards designed to prevent fraud and manipulation and protect investors and the public interest.
The funds were quick to make adjustments to the applications in order to prove to the regulator the effectiveness and safety of the instrument. For example, Nasdaq added Coinbase, one of the largest crypto exchanges, to the application to launch the BlackRock spot bitcoin ETF as an observer. This means that the platform will provide data on bitcoin prices and liquidity, as well as help prevent fraud and manipulation.
A surge in interest in bitcoin led to an increase in the price of the flagship asset to a new annual high of $31,800 and a wave of BTC accumulation by funds. However, over the past week, the price of the main cryptocurrency has again rolled back below the $30,000 mark and has since been consolidating at this mark.
