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Top 3 Leaders in the 2021 Race for the First Bitcoin ETF in the US

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Top 3 Leaders in the 2021 Race for the First Bitcoin ETF in the US

In 2013, a Bitcoin ETF was filed for the first time. Over the past few years, the SEC has been literally attacked by Bitcoin ETF offers. But the impregnable fortress never fell, and the regulatory body did not approve any of the applications.

Nevertheless, the intrigue is growing, and even inveterate skeptics say that by the end of 2021, the SEC will surrender, and the first Bitcoin ETF in the US will appear in the world.

Which TOP 3 companies are taking part in the race among others?

Name VanEck SolidX Bitcoin Trust Galaxy Bitcoin ETF Bitcoin Fund Valkyrie
Issuer VanEck Galaxy Digital Valkyrie Investments
Ticker XBTC
CIK 0001668039 0001855781 0001841175
Listing Exchange CBOE NYSE NYSE
Creation Unit Type In-Kind In-Kind In-Kind & “Cash-ish” Creates
Date Prospectus Filed 12/30/2020 1/22/2021 4/12/2021

No. 1. VanEck Bitcoin Trust

The 2020 request is not the first for this company. The issuer has submitted several applications over the past years.

The VanEck ETF is one of three to be listed on the Cboe Exchange. The benchmark is calculated daily using one-hour weighted average Bitcoin prices across the top five crypto exchanges out of 165 crypto exchanges worldwide. Exchanges include Bitstamp, Coinbase, Gemini, itBit, and Kraken.

What is a weighted average price?

It is a consolidated tape form for Bitcoin. This is similar to how major exchanges create a ticker tape for stock prices to place trades.

What are the advantages of this fund?

The advantage is that the combined feed reduces the idiosyncratic risk of market stress or disruption events on any exchange. It also prevents price collusion.

No. 2. Galaxy Bitcoin ETF

The Galaxy Bitcoin ETF, which tracks the Bloomberg Galaxy Bitcoin Index, is a joint index with Bloomberg Index Services that acts as the index provider.

Another “consolidated feed” approach is based on bitcoin prices aggregated from marketplaces chosen by the index provider for their price consistency, frequency, and market quality.

The index value is calculated daily within a 15-minute window after the market closes. It is determined by calculating the median supply/demand of Bitcoins at various sites, then averaging them separately, and then averaging these prices separately.

What are the advantages of this fund?

This approach to consolidated tape compares favorably for two reasons.

  • When calculating prices, there is no mention of volume weighting, which could bias averages towards less active exchanges.
  • The calculation window is only 15 minutes instead of an hour for other approaches. Galaxy says this is enough time to make collusion or manipulation difficult.

No. 3. Bitcoin Fund Valkyrie

The Valkyrie Bitcoin Fund is making some changes to VanEck’s approach. It tracks a third-party index, for starters, the CME CF bitcoin benchmark rate, and serves as the basis for Bitcoin futures traded on the CME exchange.

This rate is very similar to the weighted average price approach in the MVIS index, and the five exchanges from which it aggregates trade flow are the same: Bitstamp, Coinbase, Gemini, itBit, and Kraken.

The difference is that the window for calculating the CME CF bitcoin reference rates is represented by hourly intervals, divided into twelve 5-minute fragments instead of twenty 3-minute ones.

What are the advantages of this fund?

What sets Valkyrie apart from all others is the ability for Authorized Members (APs) to use cash in the creation or redemption process.

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