Valkyrie Funds Seeks Bitcoin Futures

In its most recent filing for a futures-based exchange-traded fund (ETF), Valkyrie Funds uses a popular meme from the financial Twitter community, known as “fintwit,” to attract attention and interest.

The investment firm submitted a new application on May 16 to list a Bitcoin futures-based ETF on the Nasdaq under the ticker symbol “BTFD.”

Both of Valkyrie’s Bitcoin-focused funds invest in Bitcoin futures on the Chicago Mercantile Exchange rather than Bitcoin itself.

Bitcoin futures are financial contracts that enable investors to speculate on Bitcoin’s future price fluctuations.

These contracts obligate the buyer to purchase Bitcoin at a predetermined price and the seller to sell Bitcoin at a specified future date.

Bitcoin futures allow traders to speculate on the price of Bitcoin without actually possessing the digital asset.

Initially intended for the first fund, the firm reportedly altered the suggestive ticker in October 2021.

This new fund, unlike the company’s existing block trading facility (BTF) fund, will offer leverage, allowing speculators to increase their exposure to the dominant cryptocurrency.

A BTF is a Nasdaq-listed, actively managed ETF that invests primarily in Bitcoin futures contracts.

Four distinct Bitcoin futures-based exchange-traded funds (ETFs) have been introduced to the market to date. In October 2021, the ProShares Bitcoin Futures ETF was introduced as the first.

The United States Securities and Exchange Commission (SEC) has thus far denied several attempts to introduce Bitcoin spot ETFs or funds that provide direct exposure to the dominant cryptocurrency, citing potential market manipulation in the Bitcoin market as the reason.

Grayscale, a digital asset manager, is engaged in a protracted legal dispute with the SEC as it seeks to convert its struggling Grayscale Bitcoin Trust into a Bitcoin spot ETF.

The investment firm deemed the SEC’s decision to authorize futures-based ETFs rather than spot ETFs “illogical.”

In March, the judges presiding over the dispute between the two parties at the U.S. Court of Appeals for the District of Columbia Circuit stated that the SEC “must provide a thorough explanation” regarding its understanding of the relationship between Bitcoin futures and Bitcoin spot prices.