Bitcoin ETFs: SEC Postpones Decision on Direxion’s Proposals Until September

Avi Rosten

The SEC (the US Securities and Exchange Commission) has said today that it has deferred its decision on approval for five bitcoin ETFs (Exchange Traded Funds) until September.

The proposals, filed by Boston-based ETF provider Direxion Investments on January 4th comprise five applications: one for an ETF directly linked to BTC price, and four related to its price variation.

The SEC's report in the Federal Register – its Daily Journal – explains that the Commission:

finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission, ... designates September 21, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change.

Importantly the SEC has not made any comment with respect to the highly-anticipated decision regarding ETF proposals from VanEck and SolidX – which have generated enormous expectation in the crypto-community, as well as over 250 comments on the proposal on the SEC website. The Direxion application in contrast, at the time of writing had only two comments.

With many believing this market excitement surrounding ETFs to be behind much of the bullish activity that prompted bitcoin’s substantial rise in price in the last week and today’s push past $8,000, prominent figures believe that the time is ripe for serious institutional investment into cryptocurrency.

Mike Novogratz, founder and CEO of Galaxy Digital Capital Management, in this vein recently remarked that he believes a “herd of institutional investors” is coming towards the cryptocurrency ecosystem” adding that they are “slowly coming to the realization that blockchain will be internet or Web 3.0.”

 

Featured Image Credit: "Securities and Exchange Commission" by "Scott S" via Flickr; licensed under "CC BY 2.0"

New York-Based Asset Manager Secures $190 Million for Bitcoin Fund

The New York Digital Investments Group (NYDIG) has raised $190 million for a bitcoin fund called the NYDIG Institutional Bitcoin Fund LP, according to a filing with the Securities and Exchange Commission disclosing it.

The bitcoin fund has 24 unnamed investors and was originally registered with the Securities and Exchange Commission in 2018. It originally raised $31 million from three investors, and in 2019 it raised an additional $54 million from six other investors. The fund has grown to $190 million since.

Notably, the NYDIG made headlines back in Mat after closing a $140 million fund called the Bitcoin Yield Enhancement Fund. The filing did not reveal a lot of details about the new fund and, as such, Forbes reports it's unclear whether the funds are different

If they are indeed different, then the NYDIG has become one of the largest institutional investors in the cryptocurrency space in the United States, with a total of $330 million invested in bitcoin across both funds.

Whether the new fund is a rebrand or not is further complicated by a recent name change, as the NYDIG Institutional Bitcoin Fund was previously called the NYDIG Institutional Digital Asset Fund. The asset manager did not disclose the new fund’s proposed net asset value, or any other details.

The New York-based asset manager also operates another bitcoin fund, called the NYDIG Bitcoin Strategy Fund. It’s a portfolio fund in the Stone Ridge Trusts VI and invests in cash-settled bitcoin futures contracts with the CME. The current size of the fund is unknown.

The NYDIG is a holder of the coveted BitLicense from the New York State Department of Financial Services (NYDFS), which makes it a regulated entity in the state. The former financial regulator who create the BitLicense in 2015, Benjamin Lawsky, joined the fund manager last year, 11 months before it received the license.

Even if the new fund is a rebrand, NYDIG is a new major institutional player in the cryptocurrency space. Institutional investing in the space has so far been dominated by Grayscale Investments, which has over $4 billion worth of assets under management.

Earlier this year, it’s worth noting, 3iQ announced the listing of a $14 million closed-end fund that gives investors exposure to bitcoin on the Toronto Stock Exchange (TSX).

Featured image via Pixabay.