Over the past month, several traditional financial institutions have renewed their interest in cryptocurrencies by applying for a Bitcoin exchange-traded fund (ETF). This trend has continued with GlobalX ETF applying for a Bitcoin Trend Strategy ETF in partnership with Coindesk Indices.
Bloomberg journalist James Seifart broke the news on July 21, stating that its likely effective date is March 10, 2024. The ETF will use trend-following indicators to dynamically and systematically allocate among multiple exchange-traded Bitcoin futures contracts.
The SEC is likely to approve GlobalXETF’s application
Seifart suggested that the US Securities and Exchange Commission (SEC) would approve this application because it is not the Spot Bitcoin ETF that the financial regulator has consistently rejected. According to him, the GlobalX ETF has the same process as all ETFs previously approved by the Commission.
“The only way it won’t be approved de facto is if the SEC mandates that all previously approved bitcoin futures ETFs not be listed,” he added.
The description of the indicator strategy mentioned that the allocations are based on the value of the Bitcoin Trend Indicator. This is a dynamic quantifier developed and managed by CoinDesk Indices, Inc.. The signal aims to “detect the existence, direction and strength of the price trend in Bitcoin”. Based on this signal, the underlying index will appropriately increase or decrease its allocation to bitcoin futures.
GlobalX is one of the largest investment management firms in the world, with nearly $40 billion in assets under management.
Traditional institutional firms place orders for a Bitcoin ETF
The app represents another ETF filed by financial institutions and fund providers in the past few months. In June, the SEC received a batch of ETF applications, but this is the first order in weeks not for a Spot ETF.
Renewed interest in the Bitcoin ETF began with BlackRock’s application for an ETF listing in June. Since then, other asset managers, including Fidelity, Invesco/Galaxy, Ark Invest, and Fidelity, have made similar requests.
The regulator has started the formal review process for these apps by acknowledging them.
Meanwhile, a renewed wave of interest in Bitcoin sent the price of the key asset to a yearly high above $31,000. This interest also triggered a wave of accumulation led by US institutions, which increased their exposure to the industry. However, BTC price has slipped slightly below $30,000 in the past week after shedding 1.33% from its value.
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