ARK Submits First Bitcoin Futures ETF Application in the U.S., Valkyrie's Detail Adjustments Seen as Preparations Before Launch

After SEC Chairman Gary Gensler hinted at a preference for futures-based Bitcoin ETFs, Ark Invest and asset management firm Valkyrie have resubmitted their ETF applications, raising hopes for a Bitcoin ETF approval this year.

ARK 21Shares Bitcoin Futures Strategy ETF ARKA

According to the filing submitted to the SEC by Ark on 10/13, Ark will collaborate with asset management firm 21Shares to launch an ETF named "ARKA" that will exclusively invest in Bitcoin futures on the Chicago Mercantile Exchange (CME), with 21Shares serving as a sub-advisor. The document states:

ARKA is an actively managed fund designed to invest in cash-settled Bitcoin futures contracts traded on exchanges or registered with the Commodity Futures Trading Commission (CFTC), such as the CME, to achieve its investment objective. The fund does not directly invest in Bitcoin or other digital assets.

GBTC Premium Reaches Yearly Second-Highest

In September of this year, Ark also amended the prospectus of its "Ark Next Generation Internet (ARKW)" to explore the possibility of investing in cryptocurrency exchange-traded funds (ETFs) in Canada.

At that time, ETF analysts pointed out that Ark amended the prospectus in hopes of replacing the Grayscale Bitcoin Trust (GBTC), which has been trading at a persistent premium. Despite Bitcoin rebounding to nearly $60,000 levels, the premium reached -19.97%, the second-highest of the year, following -21.23% on May 13th.

Valkyrie Bitcoin Strategy ETF BTF

Valkyrie also updated its ETF prospectus on 10/13, submitting a document to the SEC which states:

BTF is an actively managed fund aiming to invest all or a portion of its assets in exchange-traded Bitcoin futures contracts to achieve its investment objective. The fund will not directly invest in Bitcoin but seeks various Bitcoin futures contracts to achieve as close to 100% of the fund's net assets in Bitcoin futures positions.

A Good Sign for Approval?

Bloomberg ETF analyst Eric Balchunas is optimistic about Bitcoin ETF approval, claiming issuers often update final details before the release. In a tweet, he stated:

Everyone keeps asking me, what's the sign that the SEC is going to approve? It's these updated prospectuses. This is what happens right before they launch, and the Bitcoin futures ETF applied by Ark and 21Shares is a sign that the SEC will approve.

NOTABLE: Valkyrie just updated their bitcoin futures ETF prospectus (which typically only happens when ducks in row ready for launch). They added their ticker $BTF, altho no fee still. Can't say this is done deal type evidence but a good sign IMO. pic.twitter.com/GlQo4C1lBc

— Eric Balchunas (@EricBalchunas) October 13, 2021

He also noted earlier in October that, based on the 1940 Investment Company Act, SEC Chair's favoritism towards submitted futures ETFs is very active and likely to be approved on schedule, believing the chances of approval in October are over 75%.

However, Todd Rosenbluth, Senior Director of ETF and Mutual Fund Research at CFRA, holds a different view. He believes that due to the current regulatory environment, the SEC may delay approving all Bitcoin ETFs until 2022 to avoid specific institutions having an early advantage.