Following the news that another Bitcoin Futures Fund received regulatory approval by the SEC, the price of Bitcoin increased by almost $300. Although this amount is objectively small, especially in light of the current volatility, it is still seen as a positive sign, given the fact that the market is currently in a bearish downtrend.
The NYDIG Bitcoin Strategy Fund, focused on Bitcoin futures, received an approval from the Securities and Exchange Commission (SEC), allowing the company to sell its shares to institutional clients. The approval came into effect on Monday and since then, the New York Digital Investment Group LLC (NYDIG) is able to sell shares to a number of clients, including institutional investors, investment advisers and others. Furthermore, investing in these shares requires no minimum capital.
The fund calls itself a “non-diversified, closed-end management investment company that continuously offers its shares.” The end-goal of the company is to increase its capital by purchasing Bitcoin futures contracts. The currently proposed maximum for a share stands at $10. Moreover, the investment strategy of the company will be to invest only in cash-settled contracts via exchanges that are already registered with the SEC.
In the recent months, NYDIG has been steadily working on its regulation status. By the middle of November, the New York State Department of Financial Services (NYDFS) granted the BitLicense registration to ‘NYDIG Execution’. The firm represents a subsidiary of NYDIG. The BitLicense allows the firm to provide trade execution and crypto custodial services to residents from the state of New York.
The main company is permitted to provide the same services in the rest of the country, mainly by providing crypto custodian services for cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash, Ripple and Litecoin. With the newest update in terms of the NYDIG’s relationship to the SEC, the price of Bitcoin slightly surged following the news as investors perceive it as the SEC being more approachable in terms of integrating the crypto sector into a suitable legal framework.