Bitwise Asset Management, a cryptocurrency index fund provider has recently proposed for a new bitcoin-backed exchange-traded fund (“ETF”) with the U.S. Securities and Exchange Commission (SEC) which according to the company will address the regulatory concerns that doomed previous attempts made by different companies.
The company made an announcement last week on 10th Jan 2019 that it filed an initial registration statement with the U.S. Securities and Exchange Commission (SEC) for the Bitcoin ETF Trust. The company believes that its current proposal is different from that of the previously filed proposals as it relies on regulated third-party custodians allowing them to hold their physical coins. As the funds are based on a large number of cryptocurrency exchanges it will represent the majority of currently verifiable trading.
Upon getting the approval from SEC, the ETF shares will be listed on NYSE Arca that majorly focuses on options and trading stocks.
John Hyland, Bitwise global head of Exchange-Traded Funds notified about his doubt for not receiving anything as a grant for the application from SEC. He mentioning that “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.”
He further added that “we are optimistic that 2019 should be the year that a bitcoin ETF launches.”
Matt Hougan, Bitwise global head of research mentioned that the company’s proposal is informed by questions that were asked by the SEC in the past. Hougan further added, “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.”
SEC as of now has only one Bitcoin ETF rule change proposal which was submitted last year by SolidX and VanEck in partnership with Cboe. The commission has delayed the decision quite a number of times and now it is expected that the commission will finally give its decision on 27th Feb 2019.
With the company updating its current Bitwise Bitcoin ETF proposal by regulating the third-party custodians and allowing them to store actual Bitcoins in the trust, it is expected that the company might succeed in getting the approval this time.