A California asset manager has come up with a clever way to include bitcoin in an ETF | Jack Dorsey: Cash App Lightning Network integration not an ‘if’ but a ‘when’

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“We would love to make [Bitcoin] as fast and efficient and transactional as possible and that includes looking at our seller base and register. It’s not an if, it’s more of a when and how do we make sure that we’re getting the speed that we need and the efficiency.” — Jack Dorsey, CEO Twitter and Square, on integrating the Lightning Network into Cash App

The Big Block

A California-based asset manager has figured out a way to sneak bitcoin in an exchange-traded fund, and the CEO says it’s the best way to get a crypto fund approved by the Securities and Exchange Commission. 

Reality Shares, the firm behind one of the first ETFs to track the blockchain market, filed a prospectus to list a fund of currencies, which would include exposure to bitcoin futures. If approved, it would be the first fund to offer direct exposure to the spine-tingling cryptocurrency market. It would list on NYSE Arca, an exchange operated by the New York Stock Exchange.

Per a final draft of the fund’s prospectus, the ETF is actively managed to “provide investment exposure to global currencies, both fiat and virtual currencies, that have been widely adopted for use.” To that end, the fund would potentially invest up to 15% of its total assets in bitcoin futures trading on both Cboe Global Markets and CME Group. It could also invest in contracts trading on other bitcoin futures marketplaces at some point, the prospectus noted. In addition, the fund will invest in sovereign debt instruments tied to British Pounds, Japanese Yen, Swiss Francs, and money market mutual funds. 

“The SEC doesn’t want to approve a full blown crypto ETF but this limits exposure to 15%,” Eric Ervin, chief executive officer of Reality Shares told The Block. Reality Shares launched its blockchain fund, which tracks different companies involved in the nascent market, at the beginning of 2018.

Read More on The Block (3 Minutes)

Around The Block

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