Over the past month, several traditional financial institutions have renewed interest in crypto 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 Seyffart broke the news on July 21, noting that its potential effective date is March 10, 2024. The ETF will use trend-following indicators to dynamically and systematically allocate between several exchange-traded Bitcoin futures contracts.
SEC Likely to Approve GlobalXETF’s Application
Seyffart suggested that the U.S. Securities and Exchange Commission (SEC) would approve this application because it is not a Spot Bitcoin ETF that the financial regulator has consistently rejected. According to him, GlobalX ETF has the same process as all the ETFs the Commission has previously approved.
“Only possible way it wouldn’t be de-facto approved is if the SEC forces unlisting of all previously approved bitcoin futures ETFs,” he added.
The strategy description of the index stated that allocations are based on the value of the Bitcoin Trend Indicator. This is a dynamic quantitative developed and administered by CoinDesk Indices, Inc. The Signal aims to “detect the presence, 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, managing roughly $40 billion in assets.
Traditional Institutional Firms File Bitcoin ETF Applications
The application marks another ETF filing by financial institutions and fund providers in the past few months. In June, the SEC received a flurry of ETF applications, but this is the first one in weeks that is not for a Spot ETF.
The renewed interest in the Bitcoin ETF started with BlackRock applying to list a spot ETF in June. Since then, other asset managers, including Fidelity, Invesco/Galaxy, Ark Invest, and Fidelity, have filed similar applications
The regulator has begun the official review process for these applications by acknowledging them
Meanwhile, the renewed wave of interest in Bitcoin has caused the price of the flagship asset to rise to a yearly high above $31,000. This interest has also led to a wave of accumulation spearheaded by U.S. institutions, increasing their exposure to the industry. However, BTC’s price has slightly retraced below $30,000 in the past week after shedding 1.33% of its value.
