Asset manager Simplify has become the latest US firm to apply for an exchange-traded fund (ETF) linked to bitcoin futures.
The ETF is called the Simplified 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 earnings strategy, and the last is an options overlay strategy. The fund’s management fee has been fixed at 0.85%.
The filing states, “The key options overlay is a strategic exposure meant to partially hedge against bitcoin futures declines and express a firm belief about the price run-up or price movement of a specific bitcoin-linked ETF. ”
“If the price of bitcoin rises, the fund’s returns could reduce bitcoin because advisors would likely buy back the written call option at a higher price. If the price of bitcoin goes down, the fund’s return could be less than bitcoin. Because the advisor will sell the put option at a higher price or exercise the put option.
Simplified to list web3 investment tracking vehicle also entered
The Securities and Exchange Commission (SEC) has approved a number of ETF applications involving BTC futures over the past year. In January, Simplify also filed to list shares of certain Web3 firms, an investment vehicle that tracks the performance of the Simplify Volt Web3 ETF.
The SEC is currently working with other agencies to create a larger regulatory framework for the crypto market, and its possible decision may come later.
Some congressmen have insisted on bitcoin spot ETFs. However, the SEC has so far refused to approve one, citing a lack of adequate protection for investors.
Last October, ProShares and Valkyrie became the first firms in the United States to launch exchange-traded funds tied to BTC futures.
But one of the biggest institutional investor names in the field, Grayscale Investments, has said it may consider a lawsuit if its bitcoin spot ETF is rejected.