Key Takeaways:
- The U.S SEC approved an ETF that tracks stocks of companies holding significant amounts of Bitcoin on their balance sheets.
- The ETF would include companies like Tesla and PayPal.
- The approval raises hopes for a SEC approval of pure Bitcoin ETF.
NEW DELHI (CoinChapter.com) — The U.S. Securities and Exchange Commission approved an ETF managed by San Francisco-based Volt Equity. The fund, called the Volt Bitcoin Revolution ETF, aims to expose retail investors to Bitcoin by creating a portfolio of companies that hold most of their net assets in Bitcoin.
In addition, the ETF’s portfolio will also include companies that generate revenue from Bitcoin-related activities like mining, lending, transacting in Bitcoin, or manufacturing Bitcoin mining equipment. Such firms would form around eighty percent of the ETF’s portfolio.
Tad Park, CEO of Volt Equity, calls these companies’ Bitcoin revolution companies’ and is considering MicroStrategy, Marathon Digital Holdings, and other similar firms to add to the actively managed fund’s portfolio. The SEC approval comes a month before the November deadline to approve VanEck Bitcoin Trust.
In detail, the VanEck ETF is one of the earliest Bitcoin ETFs. As the SEC can only delay judgment three times, it seems Nov 14 would finally yield an answer regarding the VanEck ETF’s status. For now, Volt Equity’s ETF is the closest Americans have to a Bitcoin ETF, and its approval raises hopes for the pure Bitcoin ETF like VanEck’s.
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Meanwhile, it seems resistance at $55,000 is too strong for BTC to handle. After testing the resistance on Oct 6, Bitcoin failed to break above it and pulled back on Thursday. However, BTC was trying to breach above $55k again on Oct 8, but it remains to see if the O.G. crypto can flip the resistance into support.
Almost Bitcoin ETF
An ETF, or Exchange Traded Fund, is an investment vehicle, which investors can publicly trade like a stock. However, it tracks the performance of an underlying asset or index. As such, it provides investors exposure to the underlying asset, like gold.
A Bitcoin ETF would track the price of the flagship crypto, rising and falling with Bitcoin’s price swings.
Volt Equity’s ETF differs from other Bitcoin ETFs in that it doesn’t directly track BTC prices. Instead, it provides exposure to companies that generate a major part of their revenue from Bitcoin or Bitcoin-related activities. Volt’s CEO Tad Park believes this would insulate the fund from Bitcoin’s inherent volatility.
Mr. Park further stated that Volt’s ETF would include approximately 30 companies, including Tesla, Square, PayPal, and Coinbase. The ETF, approved on Oct 5, would trade under the ticker BTCR. In addition, the Volt CEO said he plans to go public in the New York Stock Exchange within the next three weeks.
I’m a strong believer in bitcoin and was really excited about launching an ETF that could take advantage of the coming bitcoin revolution. We can get exposure to bitcoin without necessarily holding the coin, especially with options positions.
Tad Park, CEO, Volt Equity, in an interview
The investing strategy of not investing directly in Bitcoin was necessary to get the necessary approval from the SEC. The securities regulator has been putting off approving BTC ETFs amid fears of volatility and market manipulation. As such, the SEC greenlighting Volt’s ETF indicates the regulator might be softening its stance on crypto ETFs.
Meanwhile, firms like Grayscale continue to await approval for a pure Bitcoin ETF. In August, SEC chair Gary Gensler said the agency would likely approve an ETF comprised only Bitcoin Futures. However, Grayscale’s CEO Michael Sonnenshein called the decision similar to ‘favoring one child over another.’
BTC Price Charts
In other news, BTC continues to struggle with resistance at $55k. Analysts consider the resistance as key to Bitcoin continuing its current bull run.
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At present, the flagship crypto is bullish across all time horizons, as BTC’s 50-day and 200-day Moving Average trendlines indicate. If BTC consolidates above the $55k, bulls’ next resistance target is $57,001, followed by resistance at $58,580.
In a downtrend, BTC has immediate support at $52,510, followed by support near the $50,000 mark. However, if prices slide below immediate support, bulls will try to arrest the fall near the $47,657 level, where the 50-day M.A. and 26-day EMA form a support confluence.
Furthermore, trend-based momentum oscillator MACD continues to be bullish for BTC. In detail, the indicator forecasts bullish momentum when the difference between the MACD line (12-day and 26-day EMA difference) and its signal line (9-day EMA of MACD) is positive. The MACD histogram plots this difference.
The higher the bars on the histogram, the more bullish is the momentum for BTC. On the other hand, the relative strength index for BTC is dangerously close to overvalued levels, clocking 69.41 on the daily charts. An RSI value above 70 indicates overbought/overvalued conditions for an asset, forecasting a reversal in the cards.
At the time of writing, BTC was trading at $55,235, up 2.73% on the day.
