Galaxy Digital, run by former Goldman Sachs man Mike Novogratz, has become the latest crypto-focused investment firm to submit a Bitcoin Futures Exchange Traded Fund (ETF) application with the US Securities and Exchange Commission (SEC).

Note, the word “futures”, which is important as this is not an ETF that would be backed directly by Bitcoin, but by CME futures contracts, or agreements. Some even refer to them more mockingly as IOUs.

Investopedia defines them this way: “Futures represent an agreement to buy or sell shares of an underlying ETF at an agreed-upon price on or before a specified date in the future.”

A US Bitcoin ETF is regarded as the holy grail for many of crypto’s biggest investment players. The likes of Galaxy Digital, VanEck, Gemini, Valkyrie, Ark Invest, SkyBridge Capital and at least seven others, have been chasing a Bitcoin ETF in the world’s biggest economy for the best part of a year, some much longer than that.

All those original attempts have been met with ultimate rejection, or months of non-response from the SEC that may as well have the applications filed away in a huge warehouse next to the Ark of the Covenant.


Galaxy Digital already has a “physically backed” spot Bitcoin ETF in Canada – the CI Galaxy Bitcoin ETF – which has US $190 million in assets and trades on the Toronto Stock Exchange.

But Galaxy’s US Bitcoin ETF futures route, also at this point taken by VanEck, Valkyrie, ProShares and Invesco, could be the way through the roadblock that has so far been the SEC Chairman – first Jay Clayton, and now his successor Gary Gensler.


Gazza Gensler – history buff

Crypto’s investment players clearly took notice of Gensler’s recent remarks regarding crypto ETFs, which he made at the Aspen Security Summit in July.

“I anticipate that there will be filings with regard to exchange traded funds under the [1940] Investment Company Act,” said Gensler.

“When combined with the other federal securities laws, the ’40 Act provides significant investor protections. Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures.”

Gensler is not a fan of the idea of crypto-backed ETFs – he’s set on stringently regulating the crypto space, including applying tighter guidelines to the operations of crypto custodians.

But with Galaxy Digital and others choosing the futures path, the elusive Bitcoin ETF seems likelier than ever to be a case of when, not if. That said, the SEC has 45 days in which to first respond to an ETF filing, and chances are, they’ll use every last minute of the 45th day to leave everyone hanging.

So, “wen Bitcoin ETF”? … in theory it could happen as early as late September, but breath is not being held.

Also, whether or not a CME Futures-backed Bitcoin ETF will have the effect the crypto market would like, is up for debate.