Leveraged Bitcoin ETFs? SEC To Deny Valkyrie’s Proposal

The United States SEC has approved two Bitcoin futures ETFs in recent weeks, but it is not open to approving leverage Bitcoin ETFs.

US SEC To Dismiss Valkyrie’s Leverage Bitcoin ETF Proposal

The United States Securities and Exchange Commission (SEC) is reportedly not in favor of approving leveraged bitcoin exchange-traded funds (ETF). This latest development comes after the regulatory agency approved two Bitcoin futures ETFs a week ago.

According to the Wall Street Journal, the regulator had asked at least one asset manager not to proceed with plans for a leveraged bitcoin exchange-traded fund. The media outlet cited sources close to the matter.

Per the report, the SEC said it would only approve BTC-related products that provide exposure to futures contracts. The SEC is only interested in approving Bitcoin  ETFs similar to the ones it approved last week.

Investment firm Valkyrie has submitted a proposal to the US SEC seeking to launch a leveraged Bitcoin ETF. Valkyrie wants to offer a 1.25x leveraged bitcoin futures ETF. However, the SEC doesn’t want an ETF that is comprised of borrowed funds.

The regulatory agency approved two Bitcoin futures ETFs last week. The ProShares and Valkyrie Bitcoin futures ETFs started trading on the NYSE Arca and NASDAQ exchanges, respectively, last week. However, the broader crypto market is still expecting the regulator to approve an ETF that tracks Bitcoin’s spot price.

The SEC has been hesitant to approve a Bitcoin spot ETF due to concerns of price manipulation within the crypto space.

Bitcoin Climbs Above The $60k Level Again

Bitcoin reached a new all-time high above $67k last week. However, the leading cryptocurrency has lost some of its value since then. It dropped below the $60k level yesterday as the broader cryptocurrency market encountered a correction.

However, BTC has started to recover some of its value. BTC is currently up by 3.4% and is trading above the $61k mark at the time of writing this report.