Bitwise Challenges SEC’s Reasons for Rejecting Bitcoin ETF
Crypto asset manager Bitwise has taken a stand against the US Securities and Exchange Commission’s (SEC) reasons for not approving their spot Bitcoin (BTC) fund. To strengthen their case, Bitwise submitted a review of academic literature regarding the correlation between the Bitcoin futures market and spot pricing. This move is part of Bitwise’s amendment to its filing for a spot Bitcoin fund, which the firm has been attempting to launch for several years.
SEC’s Concerns Over Spot BTC ETFs
The SEC has expressed concerns about the relationship between the Bitcoin futures market and the spot market when it comes to approving spot BTC exchange-traded funds (ETFs). The regulatory body has described the academic perspective on this matter as “mixed” or “inconclusive,” particularly regarding which market leads the other. These concerns have played a significant role in the SEC’s reluctance to approve spot funds.
Bitwise Presents Counter-Argument
In its amendment filed by NYSE Arca, Bitwise presents a counter-argument. The firm reviewed all eleven disapproval orders to address the SEC’s critical questions about the mixed academic record. Bitwise’s underlying message suggests that the academic perspective is not as mixed as portrayed by the SEC.
Dispute Over Spot and Futures Market Dynamics
Bitwise believes in the consensus shown in academic literature, which consistently highlights that the Chicago Mercantile Exchange (CME) futures market precedes the spot market during price discovery. This belief implies that the Bitcoin market is more resilient to price manipulation than claimed by regulators. Bitwise has engaged with the SEC staff on multiple occasions, presenting their findings and sharing comprehensive white papers.
Furthermore, Bitwise submitted another white paper to solidify their stance, explaining that a new Bitcoin fund would unlikely influence prices in the CME futures market. The argument is that a new spot BTC ETF’s trading dynamics wouldn’t significantly impact the CME futures market without simultaneously affecting the spot market due to the close relationship between Bitcoin futures and spot prices.
Hot Take: Bitcoin Price Trend
Bitcoin (BTC) has experienced a bearish trend over the past week, with a 3.6% drop in the past 24 hours and a 1.3% decrease over the week. At the time of writing, BTC is trading at $26,310.
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