Bitcoin Under Pressure

Invesco tries a third time for regulated Bitcoin ETF

Georgia-based asset management firm, Invesco is trying again with the US Securities and Exchange Commission (SEC) for a regulated bitcoin exchange-traded fund.

Per the filing, the new investment vehicle dubbed the Invesco Bitcoin Strategy ETF. Rather than investing directly in Bitcoin, the proposed ETF’s investment objective is to track the performance of Bitcoin futures, exchange-traded products (ETPs) and crypto ETFs listed outside the US. The futures component would be represented by front-month CME cryptocurrency futures.

The fund may also “at times and to a lesser extent” have exposure to private investment trusts such as Grayscale Bitcoin Trust.

When eventually it goes live, Invesco Bitcoin Strategy ETF may allocate its remaining property instantly to invest directly in cash, cash-like instruments or less risky securities, such the US treasury bills.

In their last attempt, Invesco and its partners tried to get around the regulatory rejection through offering a “non-diversified” fund which provides a safe harbor from diversification requirements beneath the Investment Companies Act of 1940.

Invesco has applied before for two cryptocurrency-focused exchange-traded funds (ETFs), which will track an index primarily comprised of cryptocurrency miners, blockchain technologies, and cryptocurrency buyers.

Exchange-traded funds usually track an index or group of assets but trade like stocks. ETFs differ from mutual funds, in which the manager generally attempts to beat the market’s performance, which often comes with higher fees and taxes.

So far, there have been nine other bitcoin ETFs filed with the SEC, but the agency has dashed hopes for these regulated investment vehicles with its constant rejections.

Despite investor interest, it seems unlikely that the US top regulator would be comfortable using bitcoin as an underlying asset in a regulated investment vehicle any time soon.

The SEC last month again postponed a decision to approve two proposals, leaving the title for the first approved BTC exchange-traded product still empty. The latest rejection comes as SEC Chairman Gary Gensler has called for more regulation of cryptocurrency exchanges to prevent fraud and other issues.