SEC: Wilshire Phoenix Bitcoin ETF Proposal Decision Delayed to 2020
- After more than a dozen bitcoin ETF rejections in the last couple of years, this is hardly surprising.
- Wilshire managing partner William Herrmann assures the ETF is shielded from bitcoin’s price volatility.
United States Securities and Exchange Commission building. The Tokenist
The SEC has issued a statement that it will continue to evaluate the proposal first filed by Wilshire Phoenix on a Bitcoin and U.S Treasury bond exchange-traded fund. The SEC thus delays its decision to February 26, 2020.
The security regulator has rejected more than a dozen Bitcoin ETF proposals in the last two years. Market manipulation and surveillance sharing are issues the agency would want strengthened before an approval.
William Herrmann, founder and managing partner of Wilshire, gave assurance that the ETF is shielded from Bitcoin’s price volatility because of its multi-asset feature. The managing partner made this statement in an interview with CoinDesk held in November.
He continued to explain that, should volatility increase, the trust rebalance on default should reduce its exposure in Bitcoin and increase treasury bills. As volatility tumbles, so does the treasury bill exposure.
A comment letter filed on Dec 18 “addresses how the [exchange-traded product] is structurally and fundamentally different from prior Bitcoin-related ETP applications” said Herrmann. Its content goal was to allay the concerns put forward by the SEC.
“The comment goes on to show how the two markets that are relevant to the Trust – referred to by the Commission as the ‘regulated markets of significant size’ – are the CME Bitcoin futures market and the spot market composed of the five constituent exchanges from which pricing for the CME CF BRR is determined,” he said.
The five constituent exchanges include Coinbase, Kraken, itBit, Bitstamp, and Gemini. He said these exchanges represent the majority of the Bitcoin-US dollar market. These exchanges also have surveillance-sharing agreements with CME and CF Benchmarks.
It’s a blurred short-term period for any Bitcoin ETF approval by the SEC. Going by Bitwise Asset Management’s recently rejected proposal, similar matters highlighted in Wilshire Phoenix’s bid need to be addressed.
The SEC commissioners are reviewing that rejection, though uncertain when a decision will be made.
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