SEC accepts an investment fund that will invest in Bitcoin futures contracts

The Bitcoin futures-focused NYDIG Bitcoin Strategy Fund has gained agreement from the US Securities and Exchange Commission (SEC). This gives it the right to offer its shares to institutional investors. SEC commissioner Hester Peirce called the move “a bit progress”. The SEC also revealed why they decided to approve such a fund.

SEC Bitcoin Futures Fund

According to SEC records, effective December 2, New York Digital Investment Group (NYDIG) is now authorized to provide stakes to institutional investors, including posted investment advisers, their customers, and other qualified investors. For those who intend to invest in stocks, the Fund does not offer minimum investment requirements.

The Fund will seek to purchase several Bitcoin futures so that the total value of Bitcoin based on the Bitcoin future held by the Fund is nearly 100% of the Fund’s net assets (Target Exposure), as it is reasonably practicable to achieve.

The SEC has long been unwilling to approve certain fund products that touch cryptocurrencies – exchange-traded funds (ETFs) as the prime example. However, Monday’s approval may signal a small change in its stance.

Indeed, Dalia Blass, director of SEC’s investment management division, appeared to refer to the Fund in a speech earlier this week, calling it a prime example of industry engaging with the agency on new types of products.

SEC accepts Bitcoin futures fund

U.S. SEC announced the registration statement filed by Stone Ridge Trust VI for NYDIG Bitcoin Strategy Fund effective Monday. The company filed Form N-2 with the SEC on October 2 and revised it twice, on October 16 and November 26. This form is used by the investment management companies to register and offer to sell stock under the Securities Act. Stone Ridge Asset Management Llc will be the Fund’s investment advisor. As of August 30, the company has managed about $ 15 billion in assets.

The Fund pursues its investment goals primarily by investing in Bitcoin futures contracts. The only Bitcoin futures the Fund will invest in is a cash-backed Bitcoin futures trading on commodity exchanges registered with the CFTC.

Although Blass does not identify the NYDIG fund by name, she notes that they will invest in Cash-settled BTC futures, which means that it does not face cryptocurrency depository issues and will value its holdings using the payment price on a CFTC registered futures exchange.

Cash-settled BTC futures

The Fund describes itself as a closed, diversified, managed investment company that continually supplies its stock, with the goal of achieving an increase in the cost of capital by investing in BTC futures contracts. The recommended maximum asking price per share is $ 10, while its initial capital is $ 25 million.

Details of its investment strategy, the company noted that the Fund would only invest in cash futures BTC contracts traded on commodity exchanges registered with the U.S. Commodity Futures Trading Commission.

SEC Commissioner Hester Peirce posted on Twitter to praise the approval, calling it “a bit of progress”.

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