Simplify Files Statements for a Crypto ETF With SEC

Simplify, an asset manager, has plans to list shares of an exchange-traded fund (ETF) linked to Bitcoin futures, Treasury securities, and options. The asset manager has filed a registration statement with the United States Securities and Exchange Commission (SEC).

Simplify has submitted an application with SEC on Wednesday for an investment vehicle based on a Bitcoin (BTC) futures strategy, an option overlay strategy, and an income strategy.

The ETF will be called the Bitcoin Strategy Risk-Managed Income ETF and will be listed on Nasdaq under the ticker symbol MAXI. This ETF is part of a series of exchange-traded funds from the asset management company.

Using cryptocurrency futures, the fund will indirectly invest in Bitcoin. Also, as part of its income strategy, the fund will hold short-term US Treasure securities and ETFs that invest in Treasury securities.

Simplify will purchase “exchange-traded protective put options” and write “exchange-traded call options on Bitcoin futures and/or a Bitcoin related ETF or ETFs” for its option overlay strategy.

According to the filing, the option overlay “is a strategic exposure meant to partially hedge against Bitcoin futures declines and express convictions about price run ups or about a specific Bitcoin-linked ETF’s price movement.”

The filing added that “if the price of Bitcoin goes up, the fund’s returns may underperform Bitcoin because the adviser will buy back the written call options at a likely-higher price. If the price of Bitcoin goes down, the fund’s returns may fall less than Bitcoin because the adviser will sell the put options at a likely-higher price or exercise the put options.”