- Galaxy Digital files for a Bitcoin futures ETF.
- The SEC is yet to approve this as well as many other requests.
- Canada and Brazil have already approved many ETFs
In detail, Galaxy Digital filed it with the US regulator — the Securities and Exchange Commission (SEC). The filing is done under the Investment Company Act of 1940.
Such a fund allows the company to invest in futures instead of a direct investment in Bitcoin. With a futures contract, investors can exercise a set obligation. Once the time comes, a futures contract allows the investor to access the asset in the form of buying and selling. Hence, this is a type of derivative.
For instance, a Bitcoin futures contract will likely allow the investor to buy or sell Bitcoin at its current price at a later date. This gives the investors a chance to assess and manage risks — a very useful tool in the finance world.
However, the SEC is yet to approve many other requests for ETFs. Over the past few years, many still lie in wait for the SEC’s approval. Although, this could be a drawback for the USA. In contrast, other countries have already begun initiating ETFs.
For instance, the first-ever Latin American Bitcoin ETF has been available in Brazil for about two months now. Meanwhile, Canada’s Purpose Ether ETF has surpassed 50,000 ETH. Also, Canada approved three Ethereum ETFs about four months ago.
To highlight, Bitcoin futures contracts will be subject to the rules set by the Chicago Mercantile Exchange (CME). More so, in April, Galaxy Digital filed a request for a Bitcoin ETF with the SEC. Finally, another notable role played by Galaxy Digital is the fact that it is a sub-adviser to the CI Galaxy Bitcoin ETF.