Simplify, an asset manager, has filed a registration declaration with the United States Securities and Exchange Commission in order to list shares of an exchange traded fund that is linked to Bitcoin futures, Treasury securities and options.
Simplify filed a Wednesday filing with the SEC to request an investment vehicle that was based on a Bitcoin futures strategy, an income strategy and an option overlay strategy. The Bitcoin Strategy Risk Managed Income ETF will be listed on Nasdaq under the ticker MAXI. It is a collection of exchange-traded funds managed by the asset management company.
Indirectly, the fund will invest in BTC via crypto futures. It will also hold U.S. Treasury securities short-term and ETFs that invest into Treasury securities. Simplify stated that it would buy “exchange traded protective put options” as well as write “exchange traded call options on Bitcoin futures, and/or a Bitcoin-related ETF or ETFs.”
According to the filing, “The core option overlay” is a strategic exposure that partially hedges against Bitcoin futures declines. It also expresses convictions about price rises or about specific Bitcoin-linked ETFs’ price movements. The Fund’s returns could be lower than Bitcoin if Bitcoin prices rise because the adviser will likely buy back the call options written at a higher price. The Fund’s return may be lower than Bitcoin if Bitcoin falls in price. This is because the adviser will either sell or exercise put options at a higher price.
A new filing has been filed for the “Bitcoin Strategy Risk Managed Income ETF” (ticker $MAXI). It will hold bitcoin futures and income-generating bonds, while also selling calls on ETFs. pic.twitter.com/QdVxLRyI2w
— Eric Balchunas (@EricBalchunas) April 20, 2022
In the past year, many ETF applications that are linked to BTC futures have been approved by the SEC. This is after chair Gary Gensler suggested that he would be more open for ETFs that are based on crypto futures than direct exposure. Simplify filed in January to list shares of the Simplify Volt Web3 Investment Vehicle, which tracks the performance of web3 firms.
Related: Bloomberg analysts predict that the SEC will approve spot Bitcoin ETFs by 2023
ProShares and Valkyrie were the first companies to launch exchange-traded funds that are linked to BTC futures. As of publication, however, all spot Bitcoin ETF application were rejected by the SEC. Grayscale is currently waiting for the decision of the regulatory body to determine whether Grayscale’s application to convert its Bitcoin Trust into an ETF spot Bitcoin ETF for public listing will be approved.