NYDIG –a Bitcoin-focused firm providing crypto services to financial institutions, has submitted S-1 documents with the U.S. Securities and Exchange Commission (SEC) for a Bitcoin Exchange-Traded Fund (ETF) as per details on Feb 16.
A long list of Bitcoin ETF Applicants
They now join a long list of firms, including institutional service providers who have expressed their desire to list different flavors of Bitcoin ETF.
Coincidentally, their filing is when Bitcoin prices, for the first time, reached $50k, a milestone representing more than double the price peaks of the last ecstatic crypto rally of 2017.
NYDIG is a Bitcoin-centric arm of Stone Ridge Asset Management.
The NYDIG Bitcoin ETF Details
The NYDIG Bitcoin ETF, referred to as the trust, will also hold Bitcoin. It will issue common shares that will trail the performance of Bitcoin prices less operational expenses.
Open to institutional-grade traders, the trust will only common shares in blocks of 10,000 subject to the amount of Bitcoin attributable to each share. The initial authorized participant will be Morgan Stanley.
Uniquely, the trust will not reflect how any other index or benchmark performs. Each of these common shares will trade on the NYSE Arca exchange.
NYDIG Asset Management LLC will sponsor the trust while the Delaware Trust Company is the trustee. On the other hand, NYDIG Trust Company LLC will be the trust’s Bitcoin custodian.
SEC Demands before Approval
So far, the SEC has failed to approve a Bitcoin ETF. They cite volatility concerns, the absence of established custody, and the lack of monitoring tools, making exchanges offering referencing data subject to price manipulation.
In 2018, the regulator rejected all nine applications.
Then, Jay Clayton demanded upgrades that prioritize the transparency of trading.
During the Consensus Invest Conference in New York, he said:
“What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation. It’s an issue that needs to be addressed before I would be comfortable.”
“We’ve seen some thefts around digital assets that make you scratch your head. We care that the assets underlying that ETF has good custody and that they’re not going to disappear.”
As reported, the Swiss Stock Exchange, SIX, recently revealed the listing of a new Bitcoin exchange-traded product (ETP) from the financial firm ETC Group.