NYSE Arca Files Proposed Rule Change with SEC for Bitcoin-, T-Bills-Backed Investment Trust

NYSE Arca has filed a proposed rule change with the United States Securities and Exchange Commission (SEC) for an application to list shares in a bitcoin (BTC) investment trust that would be backed by the cryptocurrency and T-bills. The development was revealed in an SEC filing published on May 20.

The Chicago-headquartered exchange — a subsidiary of the New York Stock Exchange Group — outlined that the proposed trust would invest solely in bitcoin and short-term U.S. Treasury securities with a maturity of less than one year, also known as T-Bills.

According to the filing, the Trust’s objective is for the shares “to closely reflect the Bitcoin Treasury Index [...] less the Trust’s liabilities and expenses.”

The Index, NYSE Arca notes, has two components — one representing bitcoin and the other representing U.S. treasuries, cash, or cash-like instruments — and is calculated daily and used to determine the Index’s monthly allocation between its bitcoin assets and T-Bills assets.

The filing adds that the Trust will aim to “dynamically rebalance its assets on a monthly basis to closely replicate the Index without the use of complex derivatives or leverage methods.”

NYSE Arca has appointed the custody arm of major U.S. crypto exchange Coinbase — Coinbase Custody Trust Company, LLC —  to maintain custody of the proposed Trust’s bitcoin assets in cold storage.

The filing notes that with Coinbase Custody as its proposed bitcoin custodian, the Trust has obtained insurance for up to $200 million in coverage against theft from its hot and cold wallets, which is provided “by a syndicate of industry-leading insurers that are highly rated by AM Best.”

The SEC now has 45 days to approve, reject or delay NYSE Arca’s proposed rule change, and up to 90 days to make a final decision, the filing states.

NYSE Arca’s proposed Trust is a separate application from its proposal to list a bitcoin exchange traded fund (ETF) together with cryptocurrency index fund provider Bitwise Asset Management. The SEC delayed its decision on this ETF application earlier this month, soliciting public comment as it continues to consider the application.

Just yesterday, the SEC again delayed its decision on another bitcoin ETF proposal from investment firm VanEck and financial services company SolidX for trading on the Chicago Board Options Exchange.