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Simplify went on to file for a bitcoin strategy risk managed income ETF with the US SEC
Prominent Asset manager firm, Simplify has recently reported to file an application with a registration statement at the United States Securities and Exchange Commission (SEC). The filing included seeking permission to list shares of an ETF or exchange traded fund that are linked to bitcoin (BTC) futures, securities related to treasury and options.
In a filing on Wednesday the asset manager applied with the commission for being an investment vehicle that would be based on a strategy of Bitcoin futures, an income strategy and an optional overlay strategy. The bBitcoin Strategy Risk Managed Income ETF is to be listed under the title or ticker MAXI on American stock exchange Nasdaq which is a series of exchange traded funds of the asset management company.
The fund will invest indirectly in BTC by using crypto futures and being a part of its strategy of income, that hold short term US Treasury securities and the ETFs investing in Treasury Securities. For its strategy of option overlay, asset manager firm Simplify said that it would buy exchange traded protective put options and write call options of exchange traded on Bitcoin futures or an ETF related to bitcoin.
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The option overlay at core is a strategic exposure that is meant to hedge partially against bitcoin futured that declines and express the convictions about running up the price or about specific ETFs price movement linked with Bitcoin, as said in the filing. If bitcoin prices go up, the returns of the funds may leave bitcoin behind because the advisor will purchase back the written call options at higher price likely. If the bitcoin price goes down, the returns of the fund may fall less than BTC because the advisor will set a put option at a higher price or exercise other put options.
Till date, the SEC has approved a lot of ETF applications that are linked to futures of BTC from financial firms and asset management companies last year that followed hints of SEC chairperson Gary Gensler that he would be more open for accepting crypto futures based ETFs rather than going through direct exposure. In January itself, Simplify also filed for listing its shares of an investment vehicle that tracks the performance of several certain Web 3 firms, named as the Simplify Volt Web 3 ETF.
Proshares and Valkyrie in October 2021 became two of the first firms for launching exchange traded funds that are linked to BTC futures in the United States. However, no spot Bitcoin ETF has been approved by the SEC till today. Recent example is Grayscale where it is currently waiting for a decision from the regulatory authority on an application to convert Bitcoin Trust into a Bitcoin spot ETF for acceptance as a public listing.
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