The two United States-based companies i.e. ‘AdvisorShares’ and ‘Sabretooth Advisors’ are planning to launch an ETF (Exchange Traded Fund) together. This ETF will track tech companies that use Blockchain technology and cloud computing. An excerpt from ‘Market Watch’ about the joint venture-
“The investment thesis for BKCH holds that companies utilizing cloud computing and digital companies implementing emerging technology like blockchain can realize increased profitability and appreciation in stock prices over an extended time horizon. BKCH invests in U.S.-listed equities and American depositary receipts (ADRs) of such digital and cloud companies. The portfolio manager believes these areas represent the future of technological record-keeping and information exchanging which can deliver a durable investment theme for growth equity opportunities and long-term performance.”
The idea behind the launch of this new ETF is to up the profits and share prices in a reasonable time, with the help of cloud computing and the blockchain technology. Usually, ETFs track a range of assets classes such as traditional investments as well as alternative assets like commodities or currencies. This enables the investors to short market as well as get leverage.
Market experts look at the growing number ETFs and creation of newer cryptocurrency as a sign of market maturity. Last year in February, Canada’s first ever blockchain based ETF was approved. It focused on both the large and small scale blockchain companies. As per the reports from Cointelegraph, the director of the US Securities and Exchange Commission’s (SEC)- Dalia Blass said that the SEC has “significant outstanding questions concerning how funds holding substantial amounts of cryptocurrencies and related products.” This would satisfy the legal requirements in the United States.
As per the reports from CryptoNewsZ, on 23rd Jan, BZX Equity Exchange (an initiative of Chicago Board Options Exchange) withdrew its proposed rule change by Securities and Exchange Commission (SEC), U.S. This rule change was to originally enable it to list a BTC exchange trade Fund (ETF.)
The investment firm- ‘VanEck’ and the financial services company- ‘SolidX’ were supporting the ETF. This rule change proposal was filed with SEC last year in the month of June. Since then it has been facing several delays based on Section 19 of the Securities Exchange Act. After several delays, a final date of hearing was allotted for 27th February, but now BZX Equity Exchange has withdrawn the proposed rule change application.
As per the CBOE’s spokesperson, the main reason behind the withdrawal is the shutdown of the U.S. government, since the end of the review period is around the corner. According to some legal experts, there are chances of SEC to limit its operations due to the government’s shutdown. Going into the deeper layer behind the partial shutdown is the political complication over the U.S. Mexico border. As per the CBOE’s spokesperson, there are chances of a re-filing at a later point of time in the future, once the situation is under control.