According to a registration form published on January 10, The San Francisco based crypto-asset fund provider Bitwise has sent a proposal regarding a new physically held Bitcoin ETF(Exchange Traded Fund) to the US’s Securities and Exchange Commission(SEC).
In the past, SEC has given red flags to ETF proposals, thus crushing the dreams of many crypto-asset fund providers to make ETF a reality.
A Wimplo Journalist, Jay Obrien states in his article–
“ETFs, stay as an ultimatum for the traders in the crypto industry who wish that it could provide crypto products more legitimacy in the eyes of investors while making them more accessible for brokers.
However, the U.S and European regulators have shot down many of such proposals while stating about price manipulation or the security of the underlying crypto assets.”
Bitwise holds a strong belief that the proposed Bitcoin ETF will tackle the SEC’s vital concerns about such a fund.
According to the press release this proposed ETF differs from other previously proposed ETFs on grounds that it will depend on third-party regulated custodians to avail its physical Bitcoin.
Also, the index will draw prices from a plethora of cryptocurrency exchanges thus exhibiting the majority of presently verifiable Bitcoin trading.
Stating about the Trust investment strategy in the form, Bitwise proclaims:
“Unlike other funds that may invest in diversified assets, the Trust’s investment strategy is concentrated in a single asset class: bitcoin. This concentration maximizes the degree of the Trust’s exposure to a variety of market risks associated with bitcoin. By concentrating its investment strategy solely in bitcoin, any losses suffered as a result of a decrease in the value of Bitcoin can be expected to reduce the value of an interest in the Trust and will not be offset by other gains if the Trust were to invest in underlying assets that were diversified.”
The listing exchange NYSE Arca. Inc will submit an application to list the shares of the Bitwise Bitcoin ETF, which will be confirmed at a later date.
The NYSE is expected to file a request with the SEC soon, to grant necessary NYSE rule changes in order to allow the application to be approved.
This will subsequently allow the registration statement by Bitwise to be declared effective by the SEC.
Will the SEC accept Bitwise’s proposal for an ETF? Let us know in the comments!