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Spotlight on Valkyrie’s Bitcoin ETF Proposal

The SEC’s Formal Review Process

Introduction

Valkyrie’s spot Bitcoin ETF proposal is making headlines as it secures a place on the Securities and Exchange Commission (SEC) Nasdaq rulemaking list. This notable development, which follows the SEC’s unveiling of BlackRock’s similar proposal, adds another chapter to the emerging narrative of cryptocurrency-based financial instruments. Valkyrie’s proposal symbolized as “BRRR”, was filed in early July.

The SEC’s Clarification on Valkyrie’s Bitcoin ETF

In an official statement, the SEC elaborated on the nature and benefits of Valkyrie’s proposal:

“The Trust's aim is to offer investors a cost-effective and expedient way to invest in Bitcoin. It intends to improve efficiency and convenience compared to the acquisition of a stand-alone Bitcoin. Additionally, it strives to reduce risk by diminishing the volatility typically associated with purchasing stand-alone bitcoin.”

Growing Interest in Cryptocurrency-based Instruments

This announcement closely follows the SEC’s formal listing of BlackRock’s spot Bitcoin ETF proposal for review. This sequence of events indicates an escalating interest in exploring the feasibility and potential of spot cryptocurrency-based financial instruments.

Valkyrie’s Track Record in the ETF Arena

Valkyrie isn’t new to the ETF landscape. The firm previously made an attempt in October 2021 to list a leveraged Bitcoin futures ETF, which was blocked. Despite this setback, Valkyrie rebounded by launching a futures-based Bitcoin ETF on October 22, 2021.

SEC’s Potential Acceptance of Spot BTC ETF

The updated proposal suggests that the SEC might be warming to the idea of a spot BTC ETF. The document states:

“In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change.”

Nasdaq’s Proposed Rule Change for Valkyrie’s Spot Bitcoin ETF

In the latest update, Nasdaq has proposed a rule change that would pave the way for the listing of Valkyrie’s spot Bitcoin ETF. The proposed framework stipulates, “The trust will solely hold bitcoin and will periodically issue baskets in return for deposits of bitcoin and distribute bitcoins during the redemption of baskets.”

Public Comment and Review Period

The public will have a chance to weigh in on Valkyrie’s proposal during a defined 21-day period ending on August 7. Following the notice’s publication, the SEC will undertake a review period which could last up to 45 days or possibly extend to 90 days, to reach a decision on the proposed rule change.

Conclusion

The inclusion of Valkyrie’s spot Bitcoin ETF proposal in the SEC’s formal review process illustrates the growing interest and increased openness toward exploring cryptocurrency-based financial instruments. As the regulatory landscape evolves, the potential for a spot Bitcoin ETF becomes increasingly plausible. With a strong track record in the ETF market, Valkyrie’s proposal could mark a significant milestone in the integration of cryptocurrencies into mainstream financial services. The outcome of this review, expected within 45 to 90 days, is eagerly awaited and will likely have significant implications for the future of Bitcoin and other cryptocurrencies in the financial market.

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