Neuberger Berman Commodity Fund Receives Permission to Invest 5% in Bitcoin Futures

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The US Securities and Exchange Commission has permitted Neuberger Berman to invest up to 5% of its assets in Bitcoin futures.

Neuberger can put up to 5% of its $164 million Commodity Strategy Fund for Investment in Bitcoin products, including futures and exchange-traded funds in Canada.

Neuberger, which manages more than $402 billion in client assets as of March 31, 2021, stated in a regulatory filing with the US Securities and Exchange Commission (SEC) that its application has been approved effective immediately, allowing its Commodity Strategy Fund to invest the $8.2 million from its commodities fund in Bitcoin products, either directly or through a “wholesale” transaction.

Neuberger’s futures will trade on exchanges regulated by the Commodity Futures Trading Commission (CFTC), such as the Chicago Mercantile Exchange, in the United States (CME). Despite this, Neuberger has chosen to trade on Canadian Bitcoin ETFs due to a lack of Bitcoin-related ETFs in the United States.

Neuberger submitted the first application with the Securities and Exchange Commission (SEC) on August 11 to add Bitcoin and Ethereum derivatives to its fund’s investment choices. However, Neuberger indicated in an updated regulatory filing with the SEC on August 20 that its $164 million commodities mutual fund might invest up to $5 percent of its assets in Bitcoin investments to acquire indirect Bitcoin exposure. According to a subsequent filing supplement, Neuberger changed the original, so Ethereum derivatives do not appear to be among the firm’s investment choices.

According to the article, Neuberger’s goal for cryptocurrencies is to expand the fund’s usage of it as an inflation hedge. Furthermore, the US investment company believes that pricing patterns may be used to generate additional money.

Withdrawals from Ether ETFs are causing concern.

Neuberger Berman isn’t the only company to have withdrawn its Ethereum futures application recently.

Several financial businesses have recently withdrawn their applications for Ethereum futures ETFs, causing worry among cryptocurrency enthusiasts.

Two days after filing their applications with the SEC for approval of Ethereum futures ETFs, financial firms ProShares and VanEck withdrew them.

Eric Balchunas, a senior ETF analyst for Bloomberg, noted that the sudden withdrawals might indicate that the SEC contacted both businesses and warned them that an ETF futures fund was unlikely to be approved.

On the other hand, Balchunas believes that as long as the industry sees the Ether ETFs expelled, it is excellent news for Bitcoin ETFs. In addition, it may be seen as the SEC considering allowing Bitcoin ETFs first shortly.

Earlier this month, SEC Chairman Gary Gensler said that the agency could be more amenable to ETFs based on futures rather than cryptocurrencies themselves. Several companies have applied for crypto futures ETFs, including Bitcoin futures ETFs and Ethereum futures ETFs, resulting from these comments.

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