Global X files for ETF that combines bitcoin futures and T-bills

Global X has filed to launch an ETF that will alternate between allocating to Bitcoin futures and the firm’s recently launched Treasury bill ETF, a regulatory filing shows.

The Global X Bitcoin Trend Strategy ETF will dynamically and systematically allocate between the United States and, once available, Canadian exchange traded bitcoin futures contracts and the Global X 1-3 Month T-Bill ETF, a passively managed ETF that launched this year, the ETF’s prospectus states.

The latter ETF launched on June 20 and has amassed $42mn in assets, according to data from Morningstar Direct.

The manager’s largest ETF is the Nasdaq 100 Covered Call ETF, filings show. Investors piled $1.3bn into the ETF during the year ended June 30, according to Morningstar.

This article was previously published by Ignites, a title owned by the FT Group.

Fees for the planned ETF were not disclosed.

Global X declined to comment.

Global X manages $41.8bn in assets across 107 ETFs, according to Morningstar.

“This appears to be a tactical allocation ETF that adjusts the portfolio from bitcoin futures to T-bills whenever the bitcoin trend weakens,” said Bryan Armour, director of passive strategies for North America at Morningstar.

“Market timing is extremely challenging, so these types of quantitative approaches tend not to be high performers” he said. “This is the first tactical strategy I’ve seen for bitcoin.”

The first US bitcoin futures ETF, the $1.1 billion ProShares Bitcoin Strategy ETF, launched in October 2021 and was quickly followed by similar offerings from VanEck and Valkyrie, Morningstar data shows.

Although bitcoin futures ETFs do not hold the digital asset directly, several issuers have filed to launch a spot bitcoin ETF. The Securities and Exchange Commission has repeatedly shot down those applications because of concerns about potential manipulation and a lack of surveillance from the exchanges on which the ETFs would be listed.

Last month, BlackRock set off the latest flurry of new applications or reapplications when it filed to launch a spot bitcoin ETF.

BlackRock’s application was quickly followed by similar applications from VanEck, Valkyrie, Fidelity, Invesco, WisdomTree and Bitwise. Ark Invest filed to launch a spot bitcoin ETF in April.

Those spot filings should not be an impediment to the Global X ETF, Armour said.

“This strategy has a risk-off mechanism that can cause performance to differ significantly from bitcoin itself,” he said. “There could also be a long runway to a spot bitcoin ETF, leaving plenty of time for Global X and others to go after that market.”

Ignites is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at ignites.com.