Crypto Companies Continue ETF Proposal Spree With Bitcoin, DeFi Filings

Tuesday regulatory filings show Amplify, Invesco and Galaxy Digital submitting a pair of crypto ETF bids to the SEC.

Sep 21, 2021 at 9:36 p.m. UTC
Updated Sep 22, 2021 at 1:26 p.m. UTC

A spate of cryptocurrency exchange-traded fund (ETF) filings continued Tuesday after Amplify, Invesco and Galaxy Digital filed for a pair of such products.

Invesco and Galaxy jointly filed a registration statement for a physically backed bitcoin ETF. A physical ETF tracks the target index by holding all, or some, of the underlying assets of the index. Meanwhile, Amplify has set its sights more broadly in filing for a decentralized finance (DeFi) and crypto ETF, according to a pair of regulatory filings.

The Amplify ETF application would allow the fund to invest in bitcoin futures, Canadian bitcoin funds and companies that hold more than 50% of their net assets in bitcoin, ether or another “liquid” cryptocurrency.

“Initially, the Fund expects to directly invest up to 15% of its total assets in Grayscale Bitcoin Trust (GBTC) and Canadian bitcoin ETFs investing in bitcoin,” the filing said. (Grayscale and CoinDesk share a parent company, Digital Currency Group.)

The prospectus is still subject to completion and key back-end roles are yet to be filled. For example, the pair still need to appoint a bitcoin custodian.

Invesco already has an application for a futures-linked bitcoin ETF before the Securities and Exchange Commission (SEC). A ruling on that filing is expected in October.

Long road

The SEC, which oversees ETFs within the U.S., is already reviewing over a dozen applications for various crypto-related funds, including bitcoin and ether ETFs that are based both on the actual digital asset (physically-backed) and the respective cryptocurrencies’ futures markets.

The agency has yet to approve any crypto ETFs, though SEC Chair Gary Gensler has recently suggested that a futures-based ETF filed under the Investment Company Act of 1940 might have a better chance of being approved than a physically backed ETF.

VanEck, which filed for an ETF at the end of 2020, will be the first of the recent applicants to learn how the SEC views its filing in November. Under federal regulations, the SEC has to make a final determination by then.

Danny Nelson contributed reporting.

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Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.