In a groundbreaking move, Valkyrie Investments has resubmitted its spot-Bitcoin exchange-traded fund (ETF) application, signalling a potential shift in sentiment among regulators and the traditional financial industry. This article explores the implications of Valkyrie’s decision, the amendments made to the application, and the significance of the surveillance-sharing agreement with Coinbase.
Following the Securities and Exchange Commission (SEC)’s request for more comprehensive applications, Valkyrie Investments has not only refiled its spot-Bitcoin ETF application but also added more clarity regarding its surveillance-sharing agreement (SSA). In a departure from the initial approach, Valkyrie has declared Coinbase as its exchange partner for surveillance-sharing purposes. This move aligns with the SEC’s requirement for applications to specify the spot Bitcoin exchange responsible for surveillance.
Valkyrie’s decision to amend its application and cooperate with Coinbase highlights a changing sentiment within the regulatory landscape. Previously, Valkyrie and other cryptocurrency industry players anticipated that spot ETF approval would only come once crypto exchanges were regulated. However, attempts to seek guidance from the SEC on how to regulate exchanges have mostly been met with resistance. This lack of clarity ultimately led to legal action against prominent crypto exchanges. Recognizing the hurdles posed by an unregulated industry, Valkyrie Funds CEO Leah Wald acknowledged the challenges of wrapping an unregulated asset within a regulated framework.
Valkyrie Investments’ filing represents a significant pivot in the company’s outlook on spot Bitcoin ETFs. As one of the few entities operating Bitcoin-related funds, albeit based on futures, Valkyrie has positioned itself at the forefront of the shift towards regulated spot ETFs. By actively engaging with Coinbase and addressing the SEC’s concerns, Valkyrie sets a new precedent for the company and potentially for the entire industry.
Coinbase’s role as Valkyrie’s surveillance-sharing partner in the spot ETF application carries significant weight. By partnering with a widely recognized and trusted cryptocurrency exchange, Valkyrie emphasizes its commitment to meeting regulatory requirements and ensuring investor protection. Furthermore, Coinbase’s established presence in the cryptocurrency market strengthens the credibility of Valkyrie’s application and the broader legitimacy of spot ETFs.
Nasdaq and Cboe Global Markets, the two primary exchanges where the spot ETFs will be listed, have entered into an agreement with Coinbase to fulfill the SEC’s surveillance requirements. This partnership demonstrates Nasdaq’s and Cboe’s dedication to meeting regulatory expectations and ensuring a robust surveillance mechanism for spot ETFs. By collaborating with Coinbase, these exchanges pave the way for the potential approval of other spot ETF applications in the future.
Valkyrie Investments’ resubmission and collaboration with Coinbase mark a turning point for spot Bitcoin ETFs. While the industry remains largely unregulated, Valkyrie’s proactive approach in addressing regulatory concerns and specifying a surveillance-sharing partner may encourage other players to follow suit. The decision to work with Coinbase underscores the importance of establishing partnerships with reputable exchanges to enhance investor confidence and regulatory compliance.
Valkyrie Investments’ resubmission of its spot-Bitcoin ETF application, accompanied by the declaration of Coinbase as its surveillance-sharing partner, signifies a new era for the cryptocurrency industry. By actively cooperating with regulators and addressing their concerns, Valkyrie sets a positive example for other companies seeking approval for spot ETFs. The involvement of Nasdaq and Cboe Global Markets in partnering with Coinbase further strengthens the legitimacy and potential approval of spot ETFs. As the industry and regulatory landscape continue to evolve, Valkyrie’s decision offers hope and optimism for the future of regulated spot Bitcoin ETFs.
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