SEC Approved New BTC Futures ETF But How Is This One Different?

SEC Approved new BTC futures ETF fourth in a row but it seems that this is a little different. How exactly, we find out in our latest Bitcoin news.

While investors continue to lobby the US SEC to approve a spot market BTC ETF, the SEC approved new BTC futures ETH. The Teucrium BTC Futures fund approval was granted to Teucrium Trading which is a Vermon-based company that has up until now offered crop price futures funds that track the price of corn, wheat, sugarcane, and soybeans.

The SEC even acknowledges this linkage in the Teucrium approval “the Commission is not persuaded that the market for CME bitcoin futures contracts “stands alone;” has a “lack of connection” with, and is “not specifically materially influenced” by, other bitcoin markets”.

— Sonnenshein (@Sonnenshein) April 7, 2022

An ETF bundles securities like stocks and commodities so investors can buy shares of an ETF to gain exposure to the securities without owning them directly. In the case of ETFs, there were two main types such as BTC futures and BTC spot trading. Bitcoin futures are derivative contracts that speculate on the price of crypto. Teucrium is the fourth BTC futures fund to be approved following Proshares, VanEck, and Valkyrie funds that all started trading last year. The CEO Sal Gilbertie said:

“We are pleased that the 19b4 filing was approved, and more information regarding the fund will be forthcoming when the time is appropriate.”

This is not major news. After all, the other three BTC futures ETFs all slid in price since their debut but the new fund is different. The other three funds were approved under the Investment Company Act 1940 which the SEC said provides even stronger consumer protection. However, the Teucrium ETF marks the first time that the SEC approved a BTC futures fund under the Securities act of 1933.
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The SEC said that the funds regulated under this act provide important investor protections rules about liquditiy, custody of fund assets, and valuation which are not covered under the 1933 act.

The ARK 21Shares BTC ETF that was denied recently was filed under the 1933 act and the same goes for the denied NYDIG and VanEck spot BTC ETF application. Now that a BTC futures ETF was approved under the new act, the argument was made that the protections need to be strogn enough for a spot ETF as well. The significance hasn’t been lost on the Grayscale CEO Michael Sonnenshein who was suggesting that this company could file a lawsuit against the SEC to get the GBTC converted into a spot BTC ETF. He said that the SEC can no longer cite the 40 act as being a differentiating factor between ETF and futures approvals.