Invesco Withdraws Its Application for a Bitcoin (BTC) Futures ETF

Invesco Limited has pulled out of the race to offer a BTC futures-based exchange-traded fund (ETF). The investment company, which has over $1.3 trillion in assets under management (AUM), disclosed this news earlier today. The company’s decision comes as the ProShares Bitcoin Strategy ETF awaits listing on the New York Stock Exchange today after getting the SEC’s approval on Friday.

Announcing this news, an Invesco spokesperson said,

We have determined not to pursue the launch of a Bitcoin futures ETF in the immediate near-term; however we will continue to work in partnership with Galaxy Digital to offer investors full shelf of products with exposure to this transformative asset class, including pursuing a physically backed, digital asset ETF.

However, an amended filing with the SEC shows Invesco has not officially withdrawn its ETF filing. However, it decided to push forward the effective date of its Invesco Bitcoin Strategy ETF filing to October 29. While the company did not give a reason for the withdrawal, most firms choose this resort when their products don’t meet the SEC’s trading requirements.

It is also worth noting that the company might be exploring other alternatives, as its spokesperson mentioned. According to the original filing, Invesco seeks to provide exposure to other investment vehicles like BTC-based electronic-traded notes (ETNs) and ETFs traded outside the US. The company also intends to offer private investment trusts similar to Grayscale’s Bitcoin Trust (GBTC).

Focusing on a physically-backed BTC ETF?

Invesco’s withdrawal has been a shock to many. For instance, Eric Balchunas, a senior ETF analyst at Bloomberg, was baffled that the company dropped out of the race, considering the SEC was set to pass judgment on its ETF filing next. However, he believes the company might be focusing on blockchain stock ETFs and an ETF based on physical BTC.

This news comes after Invesco filed a BTC futures ETF application in August after the SEC’s Chair, Gary Gensler, said the regulator would be more inclined to approve BTC futures ETFs than ETFs based on physical BTC.

While the regulator approved ProShares BTC futures ETF, it is not mandated to offer reasons for approving or rejecting applications. This leaves applicants rummaging in the dark to find the flaws in the prospective products.

Apart from Invesco, the SEC is set to decide the fate of the VanEck Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF on October 24 and 25, respectively. While experts believe the SEC will approve more BTC futures ETFs, the ProShares Bitcoin Strategy ETF has a head start that might see it edge out the upcoming products.