“The market can handle a lot of different issuers’ products and we very much welcome the competition — obviously, we’re coming in second to market here but we’re very excited,” Leah Wald, Valkyrie Funds CEO, said in a Bloomberg Television interview Thursday, adding “we wish our competition luck.”
Booming demand has quickly become a problem for BITO, which is bumping up against the limit on the number of front-month futures contracts it is permitted to hold by the Chicago Mercantile Exchange, according to data compiled by Bloomberg.
That could be a potential issue for Valkyrie’s fund as well, which also holds short-term Bitcoin contracts. The ProShares fund fell for a second consecutive trading session, dropping 2.2% Friday.
The U.S. Securities and Exchange Commission allowed the futures-focused ETFs to go forward after Chair Gary Gensler said they provided significant investor protections. The agency has rejected all applications for funds investing directly in the world’s largest cryptocurrency.
Still, some market-watchers say the crypto ETF industry could buck the trend when it comes to being first to go to market.
“In the past, when you had ETF launches, first-mover advantage was very sizable,” Matt Forester, chief investment officer of Lockwood Advisors at BNY Mellon Pershing, said by phone. “This area may be so new that it might take some time to sort that out.”
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