Canada-based digital asset bank Galaxy Digital has joined a growing list of firms applying to launch a Bitcoin exchange-traded fund (ETF) in the United States.
According to a preliminary prospectus filed with the United States Securities and Exchange Commission (SEC), the proposed Galaxy Bitcoin ETF will trade on NYSE Arca and “reflect the performance of the Bloomberg Galaxy Bitcoin Index.”
Like other applications submitted so far, the Galaxy Bitcoin ETF intends to “hold bitcoin and will value its shares daily based on the value of the Index.” Also, shareholders will be able to buy or sell shares during the day using their broker, although the price will be at either a premium or discount relative to the net asset value of the Shares.
A Bitcoin ETF would give both retail and institutional investors a new way to get exposure to Bitcoin without buying the underlying asset. Such a fund holds Bitcoin on behalf of its shareholders and charges a management fee for doing so.
It is worth noting that Galaxy Digital’s preliminary prospectus kicks off the process towards securing approval for such an offering. The SEC will have to acknowledge the application and open a public consultation period regarding the proposed offering before making a final decision.
The Race for a U.S. Bitcoin ETF
Meanwhile, Galaxy Digital joins a host of other firms, including VanEck Investments, WisdomTree, and Kryptoin Investment Advisors, in the race to launch the first Bitcoin ETF in the U.S. Following recent applications since the turn of the year, the SEC has already begun reviewing VanEck and WisdomTree’s filings.
To date, the regulator has rejected all attempts to launch such a product in the U.S., with then-chairman Jay Clayton citing market manipulation and lack of custodial infrastructure as primary reasons. The industry has since ushered in advanced market infrastructure as well as onboarded a host of high-profile corporate and institutional investors.
Market participants are hopeful that the SEC will finally approve at least one of the many applications on its table, and pave the way for even more mainstream investment in Bitcoin.