Reality Shares ETF Trust pulled its filling of a proposed exchange traded fund made up of 15 percent bitcoin and 85 percent global currencies and it turns out the U.S. Securities. Beforehand Exchange Commission told the Blockforce Capital that it could file the proposal-exclusively on the off chance it pulled it immediately afterward.
According to the suggestion of regulators the proposal was filed under the Investment Company Act of 1940 and pulled the proposal a day after it was filed. But it is unclear whether the proposal was gotten a green light. Eric Ervin, CEO of Blockforce, said they liked the idea but they don’t want to see it get approved just yet. But a condition was that they might have a chance, if did it as an interval fund.
An interval fund is a type of closed-end fund with shares that do not trade on the secondary market. Instead the fund periodically offers to buy back a percentage of outstanding shares at net asset value (NAV). Investors can only get in and out of the fund once per period, making it less vulnerable to manipulation and the regulator worried a fund that traded throughout the day and had open liquidity would be subject to manipulation. For Blockforce it is for the first time to release a proposal for something like one was more important than keeping its idea a secret between Blockforce and the SEC. ETF was developed by Blockforce to put the regulator at ease and on the off chance bitcoin went to zero, investors would only lose 15 percent. If it was going to go on the public ledger, they would need to file it.
And fact is that the SEC has been willing to have comments on a bitcoin ETF or an ETF with bitcoin in it. As thought by Ervin that the current Chairman is to step down, SEC’s new leadership changes will pass a pure bitcoin ETF. According to Ervin a bitcoin ETF is a perfect example of an non-correlated alternative asset that helps balance out a portfolio of just stocks and bonds.