Valkyrie’s Bitcoin mining ETF is set to be listed on the Nasdaq exchange today. This is the second such ETF approved by the top US regulator and may be a sign of good things to come for the digital asset sector.
Valkyrie’s new Bitcoin mining ETF is set to be traded on the Nasdaq exchange under the ticker WGMI. While the overall cryptocurrency sector is still reeling from a price pullback during the last two months and mining profitability is at relative lows, this could be a sign of bigger and better things to come.
As part of Valkyrie’s efforts to make Bitcoin mining sustainable, it has also decided to invest 80% of its money in companies that have at least 50% of the energy coming from renewable sources like solar, wind, and hydel. This is a good trend coming from mining companies in the USA to have increased focus on renewable resources rather than fossil fuels that are responsible for environmental disasters.
The SEC has approved various Bitcoin Minind ETFs in the recent past. They include Bitcoin futures and mining ones. However, the federal agency has rejected every spot Bitcoin ETF filed with it. So, a pure Bitcoin exchange-traded asset hasn’t been approved and the agency has been giving mixed signals for the last year or so regarding it.
But, considering the actions of the agency, a pure Bitcoin fund isn’t something it is going to allow in the country. It has rejected half a dozen such application in the last few months, most recently, an application from Valkyrie itself. The SEC has outlined its reasons behind rejecting spot funds. They state that it is difficult to collateralize the investors from such an ETF.
When it comes to such exchange-traded financial instruments, a spot ETF is the main goal of companies right now. Derivatives and mining exchange-traded funds are only the prequels to the actual action that is expected to happen once a spot asset becomes available for trading on top exchanges. Other than that, all other ETFs can try their utmost but they won’t be able to create the kind of effect that the sector need at the moment.
So, despite the good news regarding Bitcoin mining ETF from Valkyrie, the SEC might take time in releasing a spot one. Until that happens, no major effect from this angle is likely to be observed in the markets.
Read more about ETF’s here!
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