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Invesco Partners With Galaxy Digital to File for Bitcoin ETF

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What You Need to Know

  • The Invesco Galaxy Bitcoin ETF is essentially a revision of Galaxy's earlier filing for a Bitcoin ETF.
  • Invesco has at least three other crypto filings pending before the SEC, including a Bitcoin futures ETF.
  • An Invesco executive said the new filing is not only about getting the Bitcoin ETF to the market, but also about expanding the horizon.

Less than two months after Invesco filed a registration statement with the Securities and Exchange Commission to trade a Bitcoin futures ETF, the asset manager has filed to trade an ETF that would invest in physical Bitcoin.

The Invesco Galaxy Bitcoin ETF is essentially a revised version of a Bitcoin ETF filing that Galaxy Digital Fund Management had filed in April, now replacing the sponsor. Galaxy will serve as its execution agent to facilitate any sale of Bitcoin to meet certain expenses. The fund’s investment objective is to match the performance of the Bloomberg Galaxy Bitcoin Index excluding its expenses and liabilities, according to the SEC filing.

Invesco has also filed applications with the SEC for two ETFs that will invest in companies involved in blockchain and the crypto economy — the Invesco Galaxy Blockchain Economy ETF and the Invesco Galaxy Crypto Economy ETF. It has also filed an application to trade a Bitcoin futures ETF. All are pending before the SEC.

John Hoffman, head of Americas, ETFs and indexed strategies at Invesco, told The Wall Street Journal that the firm’s latest Bitcoin ETF filing “is not just about getting the Bitcoin ETF to the market. This is about expanding the horizon … [to] define this new market.”

Dave Nadig, director of research and chief investment officer of ETF Trends, said Invesco’s partnership with Galaxy gives the firm “credibility in the space” and the only reason Invesco has multiple crypto filings before the SEC is “because folks like Bitwise and VanEck already have live product on the equity side.”

Bitwise has the ​​Crypto Innovators ETF, which invests in companies involved in the crypto economy, and VanEck has the Digital Transformation ETF (DAPP), which invests in companies involved in the digital transformation of the global economy.

Nadig views the Invesco Galaxy Bitcoin ETF filing as another filing in a space where the thinking is “everyone’s getting in the pool because why not,” he says.

Still, Nadig does not expect the SEC will be approving a “non-40 Act Bitcoin ETF.” He was referring to the Investment Company Act of 1940, which requires investment companies to register with the SEC before they can offer their securities.

The SEC has made that approach “ENORMOUSLY CLEAR,” Nadig said in an email.

In his latest public comments on a crypto ETF, SEC Chairman Gary Gensler, in an interview with Washington Post columnist David Ignatius, repeated past assertions that there are regulatory gaps that need to be filled in the cryptocurrency space — such as the regulation of cryptocurrency exchanges — which would require congressional action.

“History tells us that [with] investment contracts outside an investment protection remit, people get hurt. What we have now is an asset class that’s highly speculative, stored on a digital ledger, and the values, as you said, yesterday went down, but they could go down dramatically; they could go up dramatically, and in — often cases there’s not something standing behind it other than what somebody else will pay you for it.”

More than a dozen cryptocurrency ETFs are pending before the SEC. The agency hasn’t approved any of them yet, and it has postponed decisions on several of them multiple times.

“A GLD for Bitcoin, I suspect, is not in the cards for a least a year,” said Nadig, referring to State Street’s SPDR Gold Shares ETF. But he said he expects that “futures-based crypto products will be approved this year.”