Invesco files for Bitcoin ETF without direct exposure as SEC signals openness to funds tied to BTC futures

Investment management firm Invesco is planning to launch a new Bitcoin exchange-traded fund (ETF) that will not invest in the leading cryptocurrency directly.

Invesco to launch third crypto ETF

Atlanta-based investment company Invesco has applied with the United States Securities & Exchange Commission (SEC) for a new investment product called the Bitcoin Strategy ETF.

The firm, with $1.3 trillion in assets under management, will introduce a new ETF that would not invest directly into the bellwether digital asset, but it will have full exposure to Bitcoin futures. 

The Bitcoin Strategy ETF will also invest in Bitcoin electronic-traded notes (ETNs) and crypto ETFs outside of the United States, including the Grayscale Bitcoin Trust (GBTC). 

The new fund from Invesco will also invest directly in cash and high-quality securities, including those from the US government such as US Treasury notes and bonds.

Prior to the Bitcoin Strategy ETF, Invesco filed two applications for cryptocurrency ETFs, including exposure to crypto mining companies and firms that have invested directly in the leading cryptocurrency, including Square, Tesla and MicroStrategy.

The application also details that the fund is “non-diversified,” which means that it would not need to meet diversification requirements under the Investment Company Act of 1940. 

While over a dozen Bitcoin ETFs have been filed with the US SEC, the regulator has yet to approve of any of these funds with exposure to the bellwether cryptocurrency. 

The agency has been reluctant to approve any of the cryptocurrency ETFs, citing the risk of market manipulation and the volatility of the new asset class. 

So far, the SEC has either rejected or delayed decisions on various Bitcoin ETFs, although other countries including Canada have already approved a number of crypto funds.

SEC Chair Gary Gensler recently commented that he would be more open to approving a Bitcoin ETF that does not offer direct exposure to the leading cryptocurrency. 

However, according to Bloomberg ETF research analyst James Seyffart, investors are not looking for Bitcoin futures exposure. They would like physical BTC exposure instead. 

Bitcoin price targets a $2,500 move to the upside

Bitcoin price has once again surged above $40,000, as BTC rallies on the bullish momentum. On the 4-hour chart, the leading cryptocurrency has formed a parallel channel as the digital asset starts to consolidate.

Although the governing chart pattern suggests that BTC is expecting further sideways price action, the bellwether cryptocurrency could be targeting an upswing of at least 6% with few obstacles ahead.

As long as Bitcoin price closes above the 50 four-hour Simple Moving Average (SMA) at $39,838, BTC could tag the 50% Fibonacci extension level at $42,961 as its first bullish target should the cryptocurrency slice above the topside trend line of the parallel channel at $41,215.

BTC/USDT 4-hour chart

The Relative Strength Index (RSI) suggests that the largest cryptocurrency by market capitalization is currently not overbought, signaling more room to target the upside. Bigger aspirations for Bitcoin price would aim for the upper boundary of the parallel channel above, a 13% climb to $45,821 should BTC buying pressure see a spike.

Currently, the 50 four-hour SMA acts as meaningful support for Bitcoin price at $39,838, and the next line of defense is at the 38.2% Fibonacci extension level at $39,608. A reversal of fortune could take BTC further down to the middle boundary of the parallel channel at $38,936 before reaching the demand barrier that extends from $36,482 to $37,749.

Should Bitcoin price suffer a catastrophic downturn, it may discover further support at the 200 four-hour SMA at $35,143.