Gospel for institutional investors, SEC approves first Bitcoin futures investment fund

A new Bitcoin futures fund managed by Stone Ridge, a $ 15 billion asset management company, has been approved by the US Securities and Exchange Commission (SEC). Although companies like Galaxy Digital and VanEck have recently launched similar structured funds, this new fund is only intended to invest in cash-settled futures. Cash-settled futures address regulators' concerns about potential market manipulation and have the personal support of SEC official Dalia Blass.

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In October, Stone Ridge Trust VI submitted a registration statement for the NYDIG Bitcoin Strategic Fund. The registration came into effect on Monday after two subsequent detailed amendments. A spokesperson for NYDIG said it was the first similar fund approved by the SEC.

Documents show that Stone Ridge Funds, a subsidiary of Stone Ridge Holdings Group for long-term institutional clients, will serve as an investment advisor to the new fund. As of August 30, the group had managed assets worth approximately $ 15 billion.

The document states that the new fund is a "non-decentralized, closed-managed investment company" whose shares are not listed on any exchange and that only institutional investors can invest at a unit price of $ 10. Holders are not allowed to sell or repurchase their shares daily, but can only sell part of the shares to the Fund on a regular basis. This feature aims to attract long-term investors and sustainable investment goals, and achieve high risk tolerance. In addition, the document states that the NYDIG Bitcoin Strategic Fund will not directly invest in digital assets such as Bitcoin, but will focus on investing in Bitcoin futures contracts.

According to a speech by Dalia Blass, the head of the SEC's investment management department, last week, the new fund was created as a result of the SEC's recent efforts to involve the fund industry in investor protection dialogues.

In her speech, Blass gave reasons for the agency's support for the fund. First, the fund will only invest in cash-settled futures, which will mitigate the risks and challenges of directly holding digital assets. Second, because the fund is a closed-end interval fund, it does not provide daily redemption, will not be affected by the large short-term liquidity needs of market makers, and the price will be relatively stable. In addition, the fund has taken steps to prevent potential manipulation, including providing extensive risk disclosure, hiring only registered investment consultants, and setting an initial cap of $ 25 million to limit the fund's size and growth trajectory.

However, she also emphasized that no investment product is absolutely risk-free, and she said that this is especially true of emerging investment strategies in the digital asset market.

Blass sees the NYDIG Bitcoin Strategic Fund as a "typical example" of the SEC's recent roots in the industry and claims that the agency "welcomes and values ​​constructive industry participation related to new products and new investment strategies." SEC Commissioner Hester Peirce responded to Blass' cautious optimism and tweeted that the launch of the new fund represented "a little bit of progress."