Over the past month, several traditional financial institutions have renewed interest in crypto by applying for a Bitcoin exchange-traded fund (ETF). This trend has continued with GlobalX ETF applying for a Bitcoin Trend Strategy ETF in partnership with Coindesk Indices.

Bloomberg journalist James Seyffart broke the news on July 21, noting that its potential effective date is March 10, 2024. The ETF will use trend-following indicators to dynamically and systematically allocate between several exchange-traded Bitcoin futures contracts.

SEC Likely to Approve GlobalXETF’s Application

Seyffart suggested that the U.S. Securities and Exchange Commission (SEC) would approve this application because it is not a Spot Bitcoin ETF that the financial regulator has consistently rejected. According to him, GlobalX ETF has the same process as all the ETFs the Commission has previously approved.

“Only possible way it wouldn’t be de-facto approved is if the SEC forces unlisting of all previously approved bitcoin futures ETFs,” he added.

The strategy description of the index stated that allocations are based on the value of the Bitcoin Trend Indicator. This is a dynamic quantitative developed and administered by CoinDesk Indices, Inc. The Signal aims to “detect the presence, direction, and strength of the price trend in Bitcoin.” Based on this Signal, the Underlying Index will appropriately increase or decrease its allocation to Bitcoin Futures.

GlobalX is one of the largest investment management firms in the world, managing roughly $40 billion in assets.

Traditional Institutional Firm
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Author: Oluwapelumi Adejumo

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