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Another Potential Bitcoin ETF Effort Emerges

February 12, 2019 8:51 am
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Reality Shares, the firm behind two blockchain exchange traded funds, is looking to launch a bitcoin ETF.

A recent filing with the Securities and Exchange Commission provides details about the Reality Shares Blockforce Global Currency Strategy ETF.

What Happened

The filing is conjunction with the New York Stock Exchange. While the SEC has consistently rejected efforts to bring bitcoin ETFs to market, data indicate investors remain enthusiastic about the prospect of the largest digital currency by market value and the ETF structure coming together.

Earlier this year, Bitwise Asset Management, a provider of cryptocurrency indexes and funds, filed plans with the SEC for a bitcoin ETF and VanEck recently revised a proposal to the SEC for the VanEck SolidX Bitcoin ETF.

Why It's Important

The Reality Shares filing indicates the proposed Reality Shares Blockforce Global Currency Strategy ETF would not be exclusively comprised of bitcoin. Rather, the fund, if it comes to life, would include “high-quality, short-term sovereign debt instruments listed for trading on U.S. exchanges and denominated in U.S. dollar, euro, British pounds sterling, Japanese yen and Swiss francs,” as well as bitcoin futures, money market mutual funds and/or other cash equivalents,” according to the filing.

Last year, Reality Shares introduced two blockchain ETFs: the Reality Shares Nasdaq NexGen Economy ETF (NASDAQ:BLCN) and the Reality Shares Nasdaq NexGen Economy China ETF (NASDAQ:BCNA). Those ETFs have a combined $76.92 million in assets under management.

The Reality Shares Blockforce Global Currency Strategy ETF's bitcoin exposure will come via futures trade on the CBOE or CME.

“The Fund expects to obtain exposure to Bitcoin Futures by investing up to 25% of its total assets, as measured at the end of every quarter of the Fund’s taxable year, in a wholly-owned and controlled Cayman Islands subsidiary,” according to the filing.

What's Next

The proposed fund will be actively managed. The filing did not include a ticker or expense ratio, indicating that like other proposed bitcoin ETFs, the Reality Shares Blockforce Global Currency Strategy ETF is not close to coming to market.

California-based Reality Shares sponsors seven ETFs, including the aforementioned pair of blockchain funds.

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