The shares of the NYDIG Bitcoin ETF will trade on the New York Stock Exchange (NYSE), while the NYDIG Trust will hold the custody of the Bitcoins in the fund.
On Tuesday, February 16, the New York Digital Investment Group (NYDIG) filed a Form-S1 registration statement for Bitcoin ETF with the US Securities and Exchange Commission (SEC). This is the first Bitcoin ETF application to the US SEC this year in 2021.
The filing also lists NYDIG Trust Company LLC that will serve as the fund’s Bitcoin custodian. More interestingly, banking giant Morgan Stanley will also be the authorized participant. The NYDIG filing states that the Bitcoin ETF shares will trade on the New York Stock Exchange (NYSE). The filing submitted to the SEC by NYDIG notes:
“The [NYDIG Bitcoin Trust’s] investment objective is to reflect the performance of the price of bitcoin less the expenses of the Trust’s operations. The Trust will not seek to reflect the performance of any benchmark or index. In seeking to achieve its investment objective, the Trust will hold bitcoin. The Trust will value its assets daily in accordance with Generally Accepted Accounting Principles, which generally value bitcoin by reference to orderly transactions in the principal active market for bitcoin.”
Just like digital asset manager Grayscale, NYDIG is also a dominant player in the crypto space. NYDIG serves some big institutional clients and helps them get exposure to cryptocurrencies like Bitcoin. The last year-end in November & December 2020, NYDIG raised around $150 million via two crypto investment funds. In 2018, NYDIG also secured the BitLicense from the New York State Department of Financial Services (NYDFS).
More Bitcoin ETF Applications Coming in 2021
Analysts are expecting that we can see a flood of Bitcoin ETF applications this year in the market. This is because unlike 2018, the Bitcoin rally this time is backed by solid institutional interest. Interestingly, some of the big corporates are also showing interest in Bitcoin following Tesla‘s move last week.
So far in the past, nearly 10 firms have filed for Bitcoin ETF and failed to get approval. The SEC, however, has rejected every proposer citing security concerns. However, with strong institutional participation, things could be different this time. Jeff Kilburg, founder and CEO of KKM Financial and a partner at Valkyrie, told CNBC:
“I think this is all coming together here in 2021. If they can offer a solution via an ETF, regulate it and it can trade more accurately to the actual spot price of bitcoin, that’s the win-win solution for all active and passive investors, even the ‘hodlers’”.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
