(Bloomberg) -- Valkyrie is the latest issuer to refile an application for an exchange-traded fund that invests directly in Bitcoin after the US Securities and Exchange Commission had indicated initial documents were insufficient. 

The Nashville, Tennessee-based firm said in filing that Coinbase Global Inc. will provide market surveillance in support of its proposed Bitcoin fund. The SEC had pushed back against previous filings for lacking clarity. 

The new documents filed on Wednesday state that Nasdaq, which Valkyrie would list on if approved, had on June 30 “executed a term sheet with Coinbase” to “enter into a surveillance-sharing agreement.”

“This is something I’ve been looking for. Valkyrie is one of the only Bitcoin ETF filers from the recent past that hadn’t submitted a new 19b-4 in this wave,” said Bloomberg Intelligence ETF analyst James Seyffart.

Valkyrie was one of the early issuers to launch a Bitcoin-futures ETF in 2021. That fund, the Valkyrie Bitcoin Strategy ETF, trades under the ticker BTF. 

Crypto market surveillance may be key to gaining SEC approval for a spot Bitcoin ETF. The surveillance can dramatically reduce fraud and market manipulation, which were top reasons the agency rejected around 30 spot Bitcoin ETF applications to date.

Surveillance—sharing agreements can be thought of as standard market practice, said Ophelia Snyder, co-founder and president of 21Shares, which also has an application out for a spot-Bitcoin ETF. 

“In this case, it’s actually which exchange it is that changes the conversation,” Snyder said on Bloomberg TV’s ETF IQ show. While there have been surveillance-sharing agreements in the past, “Coinbase represents such a large proportion of the US market for these products and is so well-established in this market that that’s actually the major difference.”

Following BlackRock’s mid-June filing for such an ETF, a slew of other firms filed or refiled for spot products amid market optimism that the SEC could reverse its long-standing view that such a fund shouldn’t be allowed. In evidence of a partial thaw, the agency did allow ETFs tied to Bitcoin futures in 2021 and recently also green-lit a leveraged Bitcoin-futures fund.  

BlackRock’s initial filing has not only set off a race among other issuers for similar filings, but also sparked a rally for cryptocurrencies broadly. Bitcoin has added more than 10% over the past month alone and is up more than 80% since the start of the year. The idea of a potential spot ETF is exciting for many fans of digital assets because it could mean greater accessibility for everyday investors.    

--With assistance from Katie Greifeld.

(Adds comments from Ophelia Snyder of 21Shares in the seventh paragraph.)

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