Bitwise Asset Management, a crypto-asset fund based startup founded in 2016 has revealed in a January 10 press release that it filed a proposal with the U.S SEC for a Bitcoin Exchange Traded Fund (ETF).
The crypto startup claims to have studied previous ETF applications rejected by the SEC and is optimistic that their proposal will be favored by the regulators because it addresses questions formerly posed by them.
Nature of Bitcoin ETF Trust Proposed By Bitwise
According to an initial registration form filled by the startup, the proposed Bitcoin ETF Trust will track the Bitwise Bitcoin Total Return Index, an indicator which tracks bitcoin and “meaningful hard forks.”
The startup is also proposing that the funds’ shares be listed on New York Stock Exchange (NYSE) Arca, a market that is focused on stock trading and options rather than on the major NYSE where large-cap stocks compete.
Other differences between the Bitwise’s ETF proposal is that SEC-regulated third-party custodians will store the bitcoins while index prices will be drawn from a “large number of cryptocurrency exchanges.”
The startup believes that compiling prices from top crypto exchanges globally will make it possible for the fund to reflect “the majority of currently verifiable bitcoin trading.”
Optimistic, Yet Expecting Anything
Speaking in the release, Bitwise’s global head of Exchange-Traded Funds John Hyland did not rule out any possibilities of the SEC rejecting their approval. However, he expressed optimism that the chances are high that 2019 will be “the year that a bitcoin ETF launches.”
Matt Hougan, Global Head of Research at Bitwise also shared similar sentiments and stressed how much effort they have put into solving past questions asked by the SEC about the deficiencies in listing a Bitcoin ETF on a major exchange.
The top official commented in the release,
“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,”
He added rather convincingly, “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.”
The NYSE is now expected to file for the proposed rule change in the coming days as per the release.
Meanwhile, the U.S SEC already have a pending Bitcoin ETF decision to announce on February 27, 2019. The separate application as we reported earlier was filed by VanEck and SolidX in partnership with Cboe.