Bitwise and the Great ETF Escape
You know it’s serious when the SEC is involved, and recently, Bitwise Asset Management took a significant step back from its Bitcoin ETF ambitions by withdrawing its application. This marks the second notable exit in the world of ETF applications in recent months, following in the footsteps of VanEck’s similar retreat.
A Brief History of the Bitwise Pursuit
Bitwise applied for ETF registration as far back as January 2019, a bold move in the fast-evolving landscape of cryptocurrency. Later that year, they threw in their ace — the Bitwise Report, which claimed a staggering 95% of exchange trading volume was fabricated. Imagine shouting from the rooftops that the sky is blue, only to find out the SEC wasn’t looking up. Despite the brilliant investigative work, the SEC wasn’t sold and rejected their proposal in October 2019. However, a flicker of hope emerged when the SEC chose to revisit the decision in November.
Insights from Bitwise
Matt Hougan, the global head of research at Bitwise, made his voice known regarding the withdrawal. He mentioned that this move is a strategic play in their long-term game to eventually launch a Bitcoin ETF. Their plan? Refile at the right moment and tackle the SEC’s extensive inquiries from their earlier filing, which they lovingly crafted into a 112-page response. Talk about dedication!
The Roadblocks to Getting an ETF Launched
Now, let’s get down to the nitty-gritty. An ETF, or Exchange Traded Fund, is akin to a stock-like product that tracks a specific asset or bundle of assets. For a Bitcoin ETF, this means allowing both institutional and retail investors to dip their toes into the crypto waters while relaxing on regulated exchanges. However, the SEC has been less than accommodating. Major issues like custody dilemmas and fears of market manipulation have led to perpetual rejections. Even the previous SEC chairman, Jay Clayton, acknowledged in September 2019 that while progress was happening, a lot of ‘heavy lifting’ remained to be done.
The Future: What’s Next for Bitcoin ETFs?
While Bitwise might be stepping back, the future remains uncertain but optimistic. Another ETF proposal by Wilshire Phoenix is on the SEC’s calendar, expecting a ruling by February 2020. Who knows, maybe this time the stars will align, and we’ll finally see a Bitcoin ETF hit the market. Until then, we’re all just spectators in this high-stakes game of crypto poker.
