American global investments company Invesco is planning to launch a pair of crypto-based ETFs in the US that will primarily hold crypto-related equities, according to a recent filing by the US Securities Exchange Commission.
The filing states that Invesco wants to launch Invesco Galaxy Blockchain Economy ETF and Invesco Crypto ETF to hold about 85% of their portfolio as crypto-based equities. The remaining 15% will be in other funds and trusts that also hold crypto assets.
With this filing, Invesco has joined the growing number of companies seeking to get approved for an ETF by the US Securities Commission Exchange, which has remained rather rigid and hostile towards the establishment of crypto ETFs in the US.
So far, the US SEC is yet to approve any bitcoin-related ETF, despite growing interest and applications from over 20 investment firms including Winklevoss Bitcoin shares, Galaxy Digital by Grayscale, and Wise Origin Bitcoin trust by Fidelity.
Invesco with regional offices in over 26 countries around the world made the move to try and bypass US SEC-imposed restrictions that have delayed similar applications, with some dating back more than two years.
Why Are Bitcoin ETFs So Important?
ETFs (Exchange Traded Funds) are a type of security that tracks an asset, commodity, index, or sector and which can be purchased or sold on a stock exchange like a regular stock. They are ideal for beginner investors as they have multiple benefits such as low-cost access, international market access, abundant liquidity, and a low investment threshold.
A bitcoin ETF allows investors to reduce the risk of investing directly in the crypto market and opens up the digital assets class to a wider range of investors. Unlike in the US, Canadian financial regulators approved the world’s first-ever Bitcoin ETF in March 2021, leading to tremendous excitement in the cryptoverse and further raising hopes that the US SEC would follow suit.
In similar news, American billionaire and founder at Berkshire Hathaway Warren Buffett who is also known for criticizing the value of bitcoin as an investment vehicle has also invested $500 million in a Brazil-based digital bank Nubank that plans to offer a Bitcoin ETF. At 40 million clients, Nubank is the world’s biggest bitcoin-friendly bank in the world and one of the most important and valuable digital banks in the world.
Meanwhile, Bitcoin is up 8% on the day, trading at $37,897 at the time of press, mainly due to buyers responding to oversold market conditions. According to Bloomberg strategist Mike McGlone, Bitcoin’s next resistance is at $40K.
“For #bitcoin, the primary question is whether it holds the $35,300 area for support or not. If that happens, I’m assuming a test around $38,500 is likely. If not, then I’ll want to see a higher low around $33,500 to hold.”