The United States Securities and Exchange Commission (SEC) has given the New York Digital Investment Group (NYDIG) a go-ahead. Now, it can offer shares to institutional investors.
Based on the filling published by the SEC, the NYDIG Bitcoin Strategy Fund happens to be a portfolio fund within Stone Ridge Trust VI. The fund invests in cash-settled Bitcoin futures contracts traded on exchanges registered with the Commodity Futures Trading Commission (CFTC).
At the same time, the fund doesn’t intend to invest in Bitcoin or altcoins. Instead, it seeks to purchase several Bitcoin futures. Its aim is to make the total value of the Bitcoin underlying the Bitcoin futures held by it close to 100% of its net assets of the fund (the Target Exposure). The company deems it a reasonable target. And yet it admits that there’s no assurance that the fund will achieve the Target Exposure. That said, the NYDIG plans to raise $25 million.
Wind of change?
In general, the SEC holds a negative perception of Fund products related to cryptocurrencies. Just think of the exchange-traded funds (ETFs). However, this approval shows a possible change in perception. Amplifying this point, Dalia Blass, the director of the SEC’s Division of Investment Management, seemed to have referred to the fund in a speech earlier this week. Even though she didn’t identify the NYDIG fund by its name, she noted that it as a prime example of the industry engaging with the agency on new types of products.
Notably, Blass pointed out that the fund touches upon issues like valuation, custody, liquidity. As well as, arbitrage efficiency and potential manipulation. Hence, it doesn’t face crypto custody issues, and values holdings using the settlement price on a CFTC-registered futures exchange.
Previously, Altcoin Buzz reported that the SEC changed its Head of Cyber Unit.