Bitcoin exchange-traded funds filed with the Securities and Exchange Commission are mostly dead in the water, but there may be hope for one.
Rather than outright rejecting the Bitwise Bitcoin ETP Trust, the SEC designed a longer review period, announced last week, asking for more details on how the manipulation could be prevented.
The investment firm, in a statement to FOX Business, said it would continue to press for approval.
“Bitwise remains committed to continuing to engage with the SEC on the path to launching a Bitcoin ETF. We appreciate the directed questions articulated by the SEC as we continue the dialogue on this important topic. We will also continue to work to provide the SEC with data-driven answers to their questions to help remove barriers to US public access to this important product,” said Katherine Dowling, Bitwise General Counsel and Chief Compliance Officer.
This week, the price of Bitcoin stabilized around the $43,000 level, bouncing back.
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FOX Business extracted a sample of questions the SEC is asking from the rules filing, including:
– What are the views of commentators as to whether the Trust and the Proposed Shares would be susceptible to manipulation?
– The Exchange says that “sponsor analysis shows that trading in the Trust is unlikely to become the predominant price influence in the CME [bitcoin futures] Market, even assuming aggressive first-year flow estimates of $4.7 billion and average daily trading volume of $143 million. » Do the commentators agree or disagree?
– Do commentators agree with the Exchange that “a bitcoin ETP is unlikely to experience the highest first-year flows in history” and that 2020 inflows to the Grayscale Bitcoin Trust (GBTC) of $4.7 billion be an “aggressive” estimate of year one flows to a new bitcoin ETP?
FOX Business’s inquiries with the SEC were not returned.
The commission has not been kind to Bitcoin ETF hopes, rejecting the majority of applications so far, citing concerns that investors are not sufficiently protected.
FIDELITY BITCOIN ETF SEC RULES
Earlier this year, the commission said mutual fund giant Fidelity’s application failed to satisfy regulators because it failed to show it could protect investors from fraud, as stated in the ruling. of the SEC.
“While we are disappointed with the outcome of the SEC’s deliberations that culminated in today’s disapproval order, we reaffirm our belief that the market is ready for a physical product traded in bitcoin and we look forward to continuing a constructive dialogue with the SEC,” the company said. “Fidelity’s extensive research into bitcoin trading in global spot and futures markets shows the maturation of these markets and the price discovery leadership of CME Bitcoin’s regulated futures market, which meets the standards of the SEC regarding listing approvals as applied to many existing cash-backed exchange products currently available for trading, including gold, silver, platinum, palladium and copper.”
In November, the commission rejected VanEck’s Bitcoin ETF for similar reasons.
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|BITO||PROSHARES TRUST BITCOIN STRATEGY ETF||27.92||+0.09||+0.32%|
|GCC||WISDOMTREE TRUST IMPROVED COMMODITY STRATEGY||22.44||-0.08||-0.36%|
|BITQ||TRADE CONCEPTS ON EXCHANGE TRUST BITWISE E CRYPTO INNOVATORS||5:34 p.m.||+0.21||+1.23%|
The SEC has given the green light to ETFs that offer exposure to Bitcoin but are not pure players, including ProShares Bitcoin Strategy ETF, WisdomTree’s Enhanced Commodity Strategy Fund, and Bitwise Crypto Industry Innovators ETF.