Bitcoin has crossed the $60,000 threshold for the first time in six months as investors and traders look hopeful on a SEC approval of a bitcoin futures ETFs next week, reported CNBC.
If approved, the ETFs based on bitcoin futures and structured with similar investor protections as a mutual fund under the 1940 Act would be the first funds linked to bitcoin to get the thumbs up from the Commission.
Bitcoin reached as high as $61,396.60 on Friday, prices the largest cryptocurrency hasn’t seen since April. Traders seem to be banking on an approval of the ProShares Bitcoin Strategy ETF, which is scheduled to debut on Tuesday as long as the SEC doesn’t object, followed shortly by Invesco’s bitcoin futures ETF. The review period for the SEC of the ProShares bitcoin futures ETF expires on Monday.
“The ETF news is being priced in with the market expecting an approval on Monday. This is driving the price up,” Vijay Ayyar, head of Asia Pacific at cryptocurrency exchange Luno, told CNBC.
The approval would be a big victory for the crypto industry, which has been trying for a cryptocurrency related ETF for years with the SEC.
Invesco Offers Exposure to the Crypto Economy
The Invesco Alerian Galaxy Crypto Economy ETF (SATO) invests across the crypto industry in a variety of crypto-related categories that all could benefit from positive engagement and progress for crypto assets with an SEC approval next week. The fund invests across all market caps and within developed and emerging markets.
The fund seeks to track the Alerian Galaxy Global Cryptocurrency-Focused Blockchain Equity, Trusts and ETPs Index, an index that is divided into two different security types: digital asset companies that are engaged in cryptocurrency or the mining, buying, and enabling technologies of cryptocurrency, and exchange traded products (ETPs) and private investment trusts traded over-the-counter that are associated with cryptocurrency.
To be considered for the index, a company must have a minimum full market cap of $50 million, a minimum float-adjusted market cap of $10 million, a minimum free-float factor of 20%, a minimum average daily trading value of $1 million over the last three months, and it must also be listed on a global exchange. This portion of the index is given an 85% weighting.
ETPs and private investment trusts must have a minimum market cap of $1 billion (or $500 million for current constituents), a minimum average daily trading value of $15 million over the last three months, and an open structure to be considered for the index. This portion of the index is given a 15% weighting.
SATO does not invest directly in bitcoin, cryptocurrencies or crypto assets, or in initial coin offerings or futures contracts for cryptocurrencies, and it is non-diversified. The fund may gain exposure to securities within the ETP and Trust component indirectly through a Cayman Islands subsidiary. The subsidiary is wholly owned and advised by Invesco and may constitute no more than 25% of the fund.
Top country allocation includes the United States at 32.01%, Canada at 20.48%, and China at 15.33%.
SATO carries an expense ratio of 0.60% and currently has 38 holdings.
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