New York Digital Investment Group (NYDIG) applied with the U.S. Securities and Exchange Commission (SEC) to launch a Bitcoin exchange-traded fund (ETF).
According to documents published by the regulator, NYDIG filed an S-1 in an attempt to launch a Bitcoin ETF on Feb. 16. The papers cite NYDIG Trust Company LLC as the custodian of the Bitcoin that backs the fund and financial services giant Morgan Stanley as the distributor of the ETF shares.
The news comes as Canadian regulators gave permission to launch ETFs to two companies in less than a week. The Ontario Securities Commission approved an application by Purpose Bitcoin ETF on Feb. 12, making it the first to win permission in North America. On Feb. 16, Canadian regulators also approved an application from Evolve Funds Group, which plans to launch its Bitcoin ETF on the Toronto Stock Exchange. Evolve President and CEO Raj Lala cited some advantages of "exciting news for investors" such as those:
Investors will be able to trade Bitcoin on a regulated stock exchange… Unlike the technical challenges of investing in bitcoin, units of EBIT will be safely transacted via a familiar brokerage investing platform.
NYDIG’s U.S. application with the SEC joins others by a list of other United States companies. More precisely, investment firm VanEck sent its S-1 form to the SEC on Dec. 30, and Bitcoin-specialized financial services firm Valkyrie Digital Assets filed with the regulator in an attempt to have its Bitcoin ETF approved in late January. Those are just the latest battles in a long war fought by Bitcoin proponents to launch such a product, but many believe that the climate is changing.
After winning over the world's richest person Elon Musk, tempting electric car manufacturer Tesla to invest $1.5 billion into it and convincing payment processing giants Visa, PayPal, Mastercard and United States' oldest bank BNY Mellon to adopt its technology everybody is convinced that Bitcoin is here to stay — and to do so as a part of traditional finance. Furthermore, with Bitcoin-critic Jay Clayton being replaced
The three U.S. applications are just the latest step in a years-long and so far useless battle by Bitcoin proponents to launch an ETF in the U.S. But with anti-Bitcoin SEC Chairman Jay Clayton leaving at the end of 2020 and being replaced by professor teaching digital assets and blockchain at MIT Gary Gensler, many believe that chances for a Bitcoin ETF approval are higher than they have ever been.
NYDIG’s application establishes that Morgan Stanley will distribute shares of the ETF at prices that mirror the value of the Bitcoin backing them, determined by supply and demand. The offers will trade on the NYSE Arca exchange under a yet-to-be-resolved ticker image. The filing reads:
The Trust’s investment objective is to reflect the performance of the price of Bitcoin less the expenses of the Trust’s operations. [...] The Trust will not seek to reflect the performance of any benchmark or index… In seeking to achieve its investment objective, the Trust will hold Bitcoin.