United States Securities and Exchange Commission building
United States Securities and Exchange Commission building. SEC

Bitwise Asset Management has requested the withdrawal of its application for a Bitcoin exchange-traded fund (ETF), according to a filing posted with the United States Securities and Exchange Commission (SEC) on 14 January.

Even though the news may be disappointing to some in the investment community, they are not surprising. Last year in October, the same proposal was rejected by the U.S. regulator, as it did not meet the legal requirements to prevent market manipulation or other illicit activities.

Bitwise’s ETF proposal was initially filed in January 2019, alongside the NYSE Arca. Later that same year, Bitwise released a report on exchange volume, claiming that 95 percent of Bitcoin’s trade volume was fake, which it used as an argument for the SEC to accept the ETF proposal. Even though the SEC rejected the proposal in October, one month later it decided to review its decision.

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This is not the first high-profile ETF application which has been withdrawn, with Bitwise’s competitor, VanEck, retracting theirs back in September 2019. If a Bitcoin ETF receives the green light some day, it would allow institutional and retail investors to gain a direct exposure to the currency, while still trading within the bonds of a regulated traditional exchange.

With Bitwise’s and VanEck’s proposals out of the picture, there is only one Bitcoin ETF application waiting for a decision from the SEC, the one filed by Wilshire Phoenix. While the firm claims that its ETF is shielded from volatility, making it more viable for approval, it is still under review, with the SEC expected to make a ruling by 26 February.

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