Bitwise Challenges SEC for Bitcoin ETF Approval
Bitwise, a cryptocurrency asset management company, has submitted an updated application for a Bitcoin exchange-traded fund (ETF) to address concerns previously raised by the U.S. Securities and Exchange Commission (SEC). The company argues that the cryptocurrency market has matured and that now is the right time for a Bitcoin ETF. Bitwise aims to address issues such as market manipulation, custody of digital assets, and liquidity to demonstrate the safety of the proposed ETF. Approval of a Bitcoin ETF in the U.S. could have a significant impact on the cryptocurrency markets by attracting institutional capital and increasing legitimacy. The response from the SEC remains to be seen.
Bitwise’s Objections Against SEC for Bitcoin ETF
One point of contention between Bitwise and the SEC is regarding traditional price discovery methods used by Bitwise. The SEC had doubts about these metrics but Bitwise defends its position, claiming that lack of data creates a bias against their claim about the Bitcoin CME futures market’s role in price discovery. Another concern is the frequency of analysis performed by Bitwise. The SEC questioned their use of daily data instead of intraday data, but Bitwise justifies this choice by aligning it with academic research and offering a clearer perspective of time trends. Despite these challenges, Bitwise resubmitted its request for a Bitcoin ETF in June.
Bitwise Withdraws Ethereum Futures ETF Application
In an unexpected move, Bitwise decided to withdraw its application to transform its existing Bitcoin futures ETF into a fund that would invest in both Bitcoin and Ethereum futures contracts. Speculation surrounds this decision and its implications for Ethereum futures ETFs scheduled to launch in October. Bloomberg analyst James Seyffart suggests that Bitwise may not see an advantage in having an ETF covering both BTC and ETH, especially with their Ethereum futures ETF launching shortly after. It is possible that investors prefer exposure only to Bitcoin, influencing Bitwise’s decision to maintain its focus on Bitcoin. This withdrawal follows another application withdrawal made by Bitwise in early August.
Hot Take: Bitwise Adapts Strategy for Cryptocurrency ETFs
Bitwise’s recent actions reflect a significant change in their strategy for cryptocurrency-related ETFs. By challenging the SEC and addressing concerns, Bitwise aims to pave the way for a Bitcoin ETF, which could have a profound impact on the cryptocurrency markets. However, their decision to withdraw the application for an Ethereum futures ETF suggests a shift in priorities towards maintaining exposure only to Bitcoin. This strategic move indicates that Bitwise may be adapting to market dynamics and investor preferences. As the industry evolves, it will be interesting to see how these decisions shape the future of cryptocurrency ETFs.
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