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An exchange-traded fund (ETF) has been touted as the holy grail of the global crypto ecosystem, yet there is no approved ETF in the space. Bitcoin ETF has been filed several times and it has been denied just as many times as it was filed. The U.S. Securities Exchange Commission (SEC) claims crypto firms are yet to satisfy relevant requirements.
Having prepared for about a year, Bitwise Asset Management has announced on January 10 that the firm is up to the task. The firm spent a year researching and working towards meeting the SEC requirements and thinks it has got what it takes to bring a Bitcoin ETF home. The firm demonstrated their preparedness by filing an initial registration statement on Form S-1 with the U.S. SEC. They are waiting patiently to show the SEC just how much they have researched so far and why they think they are capable of managing a Bitcoin ETF.
Upon approval, the Bitcoin ETF would be employed in tracking Bitwise Bitcoin Total Return Index produced by Bitwise Index Services, LLC – a subsidiary of Bitwise Asset Management focused on developing cryptocurrency indexes and researching on cryptocurrency investing. It will help analyze the full value of an investment in Bitcoin including meaningful ‘hard forks.’
The ETF, which is proposed to be regulated by third-party custodians, will be listed on the New York Stock Exchange (NYSE) Arca. Bitwise has charged the NYSE Arca to file an application (known as Rule 19b-4) with the SEC to list shares of the Bitwise Bitcoin ETF under a yet-to-be-disclosed ticker symbol. The company believes they have a better chance of success compared to other crypto firms which filled in the past because of the following reasons:
- They have spent a reasonable amount of time researching on the SEC requirements and have come up with the relevant answers.
- Unlike others, their Bitcoin ETF will be regulated by third-party custodians.
- Their index covers a wide range of cryptocurrencies which are mostly part of currently verifiable Bitcoin trading.
- Their management team is stacked with big-time players who have, at a time or another, worked for the approval of a first-of-its-kind ETF.
- The Bitwise Investment Advisers, LLC – a subsidiary of Bitwise Asset Management which sponsors U.S. and foreign private funds that invest in cryptocurrencies – boasts of successfully managing several Bitcoin funds in the space for over a year.
The Global Head of ETF for Bitwise, John Hyland, stated in the press release that although there is no assurance of the 19b-4 application being granted or SEC expediting the process, he is positive that a Bitcoin ETF would be approved this year. Furthermore, he explained that having a regulated bank or trust company has been a long-standing standard in the U.S. fund regulation and that standard is possible with Bitcoin.
With the said level of preparedness and the ‘weapons’ in their ‘arsenal,’ we look forward to seeing the first approved Bitcoin ETF this year.