Bitwise Hopes Its New ETF Proposal Can Sway The SEC

Will 2019 be the year of a bitcoin exchange-traded fund? Bitwise hopes so.

  • On January 10, San Francisco-based crypto-asset fund provider Bitwise Asset Management announced it had filed an initial registration statement with the US Securities and Exchange Commission (SEC) proposing a “physically held” bitcoin exchange-traded fund.

    Bitwise believes the newly proposed bitcoin ETF will address some of the SEC’s major concerns about such a fund. The fund’s value, for example, will not be based on contracts settled in cash, as with previously proposed crypto ETFs, according to a press release. This new ETF will instead be valued based on spot prices from various cryptocurrency exchanges “representing the majority of currently verifiable bitcoin trading.”

    Bitwise also says its ETF will differ from previous proposals because it will employ the services of “third party custodians to hold its physical bitcoin” instead of holding funds on an exchange or in a personal bank account.

    If approved, the ETF will be listed on NYSE Arca, an electronic exchange for trading stocks and options. Bitwise’s ETF would track the “Bitwise Bitcoin Total Return Index” to keep tabs on the value of bitcoin and any “meaningful hard forks.”

    John Hyland, global head of exchange-traded funds for Bitwise, hopes for swift and hearty approval from the SEC: “While there can be no assurance that the … 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.”

    The SEC has already denied several proposed bitcoin-backed ETFs, including a proposal from the Winklevoss twins in July 2018 and bids from three different crypto-backed companies in August 2018. The jury is still out on the Chicago Board Options Exchange’s proposal for a bitcoin-backed ETF, but the SEC must approve or deny that proposal by February 27.

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