Bitwise has submitted a new Bitcoin ETF proposal to the SEC with new features to allay the government agency’s fears.
The march for greater cryptocurrency acceptance marches on, with new businesses accepting virtual currencies every day. However, such progress is still being impeded in the United States by the federal government, notably the Securities and Exchange Commission (SEC). The SEC has continued to deny the launching a Bitcoin ETF. In their latest proposal, Bitwise offers up an ETF that has key features designed to allay the concerns of the SEC.
New Bitcoin ETF Filed
In recently filed paperwork, Bitwise Asset Management has proposed a physically held Bitcoin exchange-traded fund. This new fund is to be the Bitwise Bitcoin Total Return Index, which would track BTC and any “meaningful” hard forks.
Bitwise announced today the filing of an initial registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) relating to a new proposed physically held exchange-traded fund. https://t.co/2k23ghuWss and https://t.co/tNKE4XNNni
— Bitwise (@BitwiseInvest) January 10, 2019
The most important aspects of this proposed Bitcoin ETF are that the index will draw prices from a large number of crypto exchanges and that it will rely upon regulated third-party custodians to actually hold the physical bitcoins.
John Hyland, Global Head of Exchange-Traded Funds for Bitwise, says:
While there can be no assurance that the 19b-4 application will be granted or the SEC will review and ultimately accelerate the registration statement, we are optimistic that 2019 should be the year that a bitcoin ETF launches.
Will the SEC Approve?
The fact that a trusted and regulated third-party entity will hold the bitcoins is a smart move. The SEC has expressed numerous concerns over an ETF, mostly due to consumer protection and worries over manipulation.
Matt Hougan, Global Head of Research for Bitwise, notes:
The SEC has asked thoughtful and relevant questions about the quality of the crypto trading ecosystem, the reliability of crypto pricing, the strength of the arbitrage function in crypto and the robustness of crypto custody. We have spent the past year researching these questions and look forward to discussing those findings with the SEC staff in connection with the filing and listing application.
John Hyland adds:
We believe the crypto trading ecosystem has evolved in significant ways in the past year. Having a regulated bank or trust company hold physical assets of a fund has been the standard under U.S. fund regulation for the last 80 years, and we believe that is now possible with bitcoin.
The launch of a Bitcoin ETF will usher in a slew of institutional investors and a possible bull run, but the SEC has continued to frustrate the hopes of Bitcoin enthusiasts. The agency has shot down numerous proposals and has dragged their feet as well. The current VanEck/SolidX Bitcoin ETF proposal has been postponed to late February.
Do you think this move by Bitwise will finally get the SEC to offer up their approval? Let us know in the comments below.
Images courtesy of Twitter/@BitwiseInvest and Shutterstock.