Bitcoin price behavior vs. 200-day moving average

IN BRIEF

  • Volt Equity files an application with the U.S. SEC for an ETF.
  • The ETF would offer exposure to bitcoin companies.
  • U.S. regulators are stepping up their game as ETF applications pile up.

Volt Equity has filed an exchange-traded fund (ETF) application with the U.S. Securities and Exchange Commission (SEC). The ETF would offer exposure to bitcoin-related companies, including MicroStrategy.

The Volt ETF trust will invest in companies that are involved with bitcoin, similar to the Bitwise ETF. Notably, one of the company’s in the portfolio is MicroStrategy, with up to 25% of the fund possibly being earmarked for it.

The Volt ETF could also make up for potential market risk by investing 20% of the fund into the equities market. The ETF would trade on NYSE Arca.

The ETF would not offer direct exposure to bitcoin — something that regulators are wary of due to market volatility and price manipulation. The US SEC delayed its decision on the VanEck ETF, which would have offered investors direct exposure to the cryptocurrency.

So far, no ETFs that have offered direct exposure to bitcoin have been approved. Still, analysts are somewhat hopeful that one will be approved by the end of the year, based on the fact that authorities are introducing regulation and companies are keen on compliance.

In the filing, Volt Equity notes the risks involved with investing in cryptocurrencies, hence the 20% allocation towards equities. It also mentions the lack of regulation in the crypto market, something which the U.S. has been diverting much of its time towards in recent months.

ETF applications pile up

Several ETFs are currently being filed by investment firms, who are eager to join in as global interest in cryptocurrencies grows. However, there are several regulatory hurdles, and the U.S. is particularly cagey about approving any ETFs that provide direct exposure to bitcoin.

Several prominent names in the U.S. regulatory landscape have commented on the risks associated with cryptocurrencies, namely investor protection, market volatility, and price manipulation. Money laundering, the financing of illicit activities, and taxation are also key issues.

To that end, these authorities, including SEC Chairman Gary Gensler and U.S. Treasury Secretary Janey Yellen, have issued warnings about the crypto market. The U.S. has stopped short of introducing any strict regulation, but the general sense is that it will issue laws to clamp down on any unlawful activity.

U.S. President Joe Biden could bring up the subject of cryptocurrencies and the cybersecurity risks it poses during the G7 summit. Authorities in the country recently recovered a majority of the ransom, paid in bitcoin, that was used to meet the demands of the Colonial Pipeline hackers.

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