The ETF will only track companies that have 80% or more of their net assets in Bitcoin.
The U.S. Securities and Exchange Commission (SEC) has approved an exchange–traded fund (ETF) that aims to provide exposure to companies whose net assets and revenues come primarily from Bitcoin or BTC-related activities.
In addition to companies that have a balance sheet with significant Bitcoin holdings, the ETF will also pursue other companies that are actively engaged in Bitcoin mining, lending or manufacturing BTC mining hardware.
The fund, Volt Crypto Industry Revolution and Tech ETF, was approved on October 5.
According to a prospectus filed with the SEC, the actively managed ETF will map both U.S. and foreign companies. Examples of potential new entrants include MicroStrategy, BitFarms and Marathon Digital Holdings.
The ETF does not offer direct investments in Bitcoin (BTC). However, it will offer exposure through Bitcoin-centric companies, with 80% or more of net assets invested in such firms. The fund will also seek to invest 20% or less in the stock markets to offset the risks associated with the crypto-centric portfolio.
Tad Park, founder and CEO of Volt Equity, is the fund’s portfolio manager and founded the company in 2020. Previously, Park worked as a senior software engineer for Silicon Valley-based Sonder Corp.
Opposite Business Insider explained he that his motivation for creating the fund was his strong belief in Bitcoin and he wanted an ETF that would allow investors to take advantage of the opportunities that crypto offers.
“We can engage in Bitcoin without necessarily holding the coin, especially with option positions”added Park.
The company first applied for the ETF in June 2021. The approval came just days after the SEC again postponed the approval of a direct Bitcoin ETF.