Investment manager Invesco, which has $364 billion in assets under management (AUM), has become the latest company to file with the US Securities and Exchange Commission (SEC) for an exchange-traded fund (ETF) that will offer exposure to Bitcoin and other assets.
However, the firm says it won’t be investing directly in the cryptocurrency instead in Bitcoin futures.
According to the filing Thursday, Invesco Bitcoin Strategy ETF will invest in cash-settled bitcoin futures contracts traded on CME. At times, it also seeks to invest in exchange-traded products (“ETPs”) and ETFs listed outside the US, and open-ended private investment trusts that are linked to bitcoin such as Grayscale Bitcoin Trust (GBTC).
The “non-diversified” Fund will also invest in cash, cash-like instruments such as U.S. Government securities, money market funds, corporate debt securities, and other short-term unsecured promissory notes.
The collective “Collateral is designed to provide liquidity, serve as margin or otherwise collateralize the Subsidiary’s investments in bitcoin futures,” reads the document.
SEC Chair Gary Gensler, who has been getting increasingly vocal about regulating the crypto industry, said he is open to approving a crypto ETF this week. The agency has received several, in double digits applications.
But as we reported, Gensler has warmed to a Bitcoin futures backed ETF and not a physically-backed ETF, which is the main deal.
Eric Balchunas, the Senior ETF Analyst for Bloomberg, noted that Invesco rushed this filing in for a Bitcoin Strategy ETF under 40 Act to “satisfy Gensler” and won’t be surprised if several like these are filed by Friday night alone. Balchunas said,
“Here’s inv strategy. Basically the SEC’s hang up w 40 Act could end up funneling billions into derivatives, GBTC (which is a major reason ETF needed!), as well as up north into another country when the ppl just want an ETF that holds bitcoin directly.”