Invesco has pulled the plug on its Bitcoin (BTC) Futures ETF application for now, just hours before ProShares’ product debuted on the NYSE.
Invesco will soon stop trading Bitcoin futures ETF
In a move that surprised some experts, Invesco Ltd decided not to immediately continue its Bitcoin futures application. Invesco Ltd is an investment management company with $1.3 trillion in assets. An Invesco spokesperson said:
“We have decided not to continue the launch of a Bitcoin Futures ETF in the near term.”
The company added that it will continue its Galaxy Digital partnership to provide investors with a range of products with exposure to digital assets. An example of this is a physically backed Bitcoin ETF.
A physical Bitcoin ETF is an investment vehicle designed to track the actual price of the underlying asset. Shares in the fund are traded on a traditional stock exchange. Essentially, Bitcoin ETFs would give investors exposure to the world’s largest cryptocurrencies without the need to buy and store the asset itself.
A futures ETF, on the other hand, is a contractual agreement that obliges a trader to buy or sell an asset at a specified time, quantity, and price. Chicago Mercantile Exchange is currently the only regulated platform in the US to offer Bitcoin futures.
Invesco was one of the first companies to apply for a futures-based Bitcoin ETF in August. It did this shortly after SEC chairman Gary Gensler revealed that the regulator would likely prefer such a product over a physical Bitcoin ETF.
More Bitcoin Futures ETFs Expected
On Tuesday, ProShares launched a Bitcoin futures ETF. Invesco was expected to become the second company to make a similar offer, as the filing was not rejected by the SEC before the October 19 deadline.
However, the decision to drop the submission may only be temporary. Invesco postpones its Bitcoin Strategy ETF effective date to October 29, 2021.
In addition, there are also two other Bitcoin futures ETFs that may be trading next week. These are the VanEck Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF. However, if approved, the SEC is not required to provide an answer as to why. Leaving potential applicants in the dark about what works and what doesn’t.