Asset manager Simplify has become the latest U.S. firm to apply for a an exchange-traded fund (ETF) linked to bitcoin futures.
The ETF is called the Simplify Bitcoin Strategy Risk-Managed Income ETF and has three strategies aimed at generating income and capital gains.
The first is a bitcoin futures strategy, the second is an income strategy, and the last is an option overlay strategy. The fund’s management fee is set at 0.85%.
“The core option overlay is a strategic exposure meant to partially hedge against bitcoin futures declines and express convictions about price run-ups or about a specific bitcoin-linked ETF’s price movement,” said the filing.
“If the price of bitcoin goes up, the Fund’s returns may underperform bitcoin because the adviser will buy back the written call options at a likely-higher price. If the price of bitcoin goes down, the Fund’s returns may fall less than bitcoin because the adviser will sell the put options at a likely-higher price or exercise the put options.”
Simplify also filed to list Web3 investment tracking vehicle
The Securities and Exchanges Commission (SEC) has approved many ETF applications linked to BTC futures in the last year. In Jan, Simplify also filed to list shares of an investment vehicle tracking the performance of some Web3 firms, the Simplify Volt Web3 ETF.
The SEC is currently working with other agencies to form a larger regulatory framework for the crypto market, and its possible decisions could come after.
Somehave pushed for bitcoin spot ETFs. However, the SEC has so far refused to approve one citing a lack of sufficient protection for investors.
Last Oct, ProShares and Valkyrie became two of the first firms to launch exchange-traded funds linked to BTC futures in the United States.
But Grayscale Investments, one of the biggest institutional investor names in the space, has said that ita lawsuit if its bitcoin spot ETF is rejected.
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