Valkyrie Funds has become the first asset manager to create a bitcoin futures exchange-traded fund (ETF) on the Nasdaq Exchange, listing the Valkyrie Bitcoin Strategy Fund (BTF) on Friday, Oct. 22.
“For us, Nasdaq was the obvious choice for our first ETF,” said Valkyrie Funds Chief Executive Officer Leah Wald. “When looking at potential listing partners, it makes sense to choose an innovation-focused, technology-first venue that has been at the forefront of the crypto revolution.”
BTF allows investors to gain exposure to bitcoin in a regulated investment vehicle without having to buy the cryptocurrency directly. Unlike ETFs that track a basket of securities, the value of the Valkyrie Bitcoin Strategy ETF is derived from the price movement of bitcoin futures contracts.
In an interview with Bloomberg, Wald elaborated on why some investors would prefer to own a bitcoin futures ETF over bitcoin itself, noting that the latter is not a regulated asset, but CME futures are.
“There is more efficient price discovery, and it does satisfy concerns around wash trading and inaccurate data. Lastly, there is no need to worry about risks around security and custody with the full faith of the SEC-regulated Nasdaq-traded ETF,” Wald said.
For this fund, Valkyrie partnered with U.S. Bank Fund Services for custody. According to Valkyrie Funds Chief Investment Officer Steven McClurg, who recently spoke with the Wall Street Journal, the ETF will exclusively trade in front-month futures contracts.
“We do plan to roll into the next month’s futures contracts as efficiently as possible, and we do believe that our team’s deep expertise in these markets does give us an edge over other offerings,” Wald said during an interview on CNBC on Thursday.
Valkyrie’s bitcoin futures ETF comes just a few months after Securities and Exchange Commission Chair Gary Gensler signaled that he would be receptive to ETFs that trade in bitcoin futures so long as they follow stricter rules usually reserved for mutual funds. The SEC is reportedly reviewing almost two dozen ETF filings for bitcoin and bitcoin futures. Notably, Wald mentioned that Valkyrie has also submitted an application for a spot bitcoin ETF.
“We’re on the edge of our seats to see whether the filings get through the SEC,” Giang Bui, head of U.S. exchange-traded products at Nasdaq, told the Journal. “We’re all very hopeful.”
The Valkyrie Bitcoin Strategy Fund is the first cryptocurrency futures-focused ETF on Nasdaq, joining more than 400 listed ETFs already trading on the exchange. Nasdaq provides a trusted execution platform, as well as a reliable market structure, regulatory expertise and advocacy.