Crypto startup Bitwise Asset Management wants to launch a physically settled bitcoin exchange-traded fund (ETF).
The company has filed an initial registration form proposing the Bitwise Bitcoin ETF Trust with the U.S. Securities and Exchange Commission (SEC). The fund would track the Bitwise Bitcoin Total Return Index, which tracks bitcoin and “meaningful hard forks.”
If approved, NYSE Arca, which focuses on trading stocks and options (rather than large-cap stocks, which are traded on the New York Stock Exchange), will list shares of the ETF.
In a statement, Bitwise global head of Exchange-Traded Funds John Hyland noted that the SEC may not grant the application, adding:
“We believe the crypto trading ecosystem has evolved in significant ways in the past year … Having a regulated bank or trust company hold physical assets of a fund has been the standard under U.S. fund regulation for the last 80 years, and we believe that is now possible with bitcoin.”
Further, Hyland said, “we are optimistic that 2019 should be the year that a bitcoin ETF launches.”
The SEC currently has one bitcoin ETF rule change proposal sitting before it, filed by VanEck and SolidX in partnership with Cboe last year. A decision on the proposal has been delayed a number of times, and now faces a final deadline of Feb. 27, 2019.
According to a press release, Bitwise’s proposal differs from previous bitcoin ETF proposals by having regulated third-party custodians store the actual bitcoins in the trust.
Further, the index that the ETF is based on will base prices on data drawn from a “large number of cryptocurrency exchanges,” which will allow it to represent “the majority of currently verifiable bitcoin trading.”
Bitwise global head of research Matt Hougan said the company’s proposal is based on questions asked by the SEC in the past.
“We have spent the past year researching these questions and look forward to discussing those findings with the SEC staff in connection with the filing and listing application,” he added.
NYSE Arca will file for the actual rule-change proposal “in the coming days,” the press release explained.
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