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The Crypto startup Bitwise Asset Management has proposed a new bitcoin exchange fund (ETF) that, according to him, would have solved the regulatory concerns that condemned previous attempts.
The company has submitted an initial registration form which proposes the Bitwise Bitcoin ETF Trust with the US Securities and Exchange Commission (SEC). The fund would monitor the Bitwise BitTrans Total Return index, which measures the value of the bitcoin plus any "significant significant fork".
If the ETF is approved, its shares will be listed on NYSE Arca, which focuses on trading in stocks and options (rather than large caps, which are traded on the New York Stock Exchange).
The initial registration statement indicates that Bitwise wants to support its index for the valuation of the fund at spot prices from physically established stock exchanges and fixed-term contracts, rather than contracts with cash settlement, as the ETFs proposed above would have done.
In a statement, Bitwise's global leader of publicly traded funds John Hyland noted that the SEC could not grant the application, adding:
"We believe that the cryptographic commerce ecosystem has evolved significantly in the last year … Having a regulated bank or trust company holding a fund's physical assets has been the standard under the regulation on US funds over the last 80 years, and we believe it's now possible with bitcoins. "
In addition, Hyland said: "We are optimistic that 2019 should be the year a bitcoin ETCO is launched."
At the moment the SEC has a proposal to modify the rules of the bitcoin ETF, compiled by VanEck and SolidX in collaboration with Cboe last year. A decision on the proposal has been postponed a number of times and now risks a final deadline of 27 February 2019.
Past efforts
According to a press release, Bitwise's proposal differs from the previous bitcoin ETF proposals by having regulated third-party custodians who store the actual bitcoins in the trust.
In addition, the index on which the ETF is based will determine prices using data from "a large number of cryptocurrency exchanges", which will enable it to represent "the majority of the currently verifiable bitcoin trade".
Matt Hougan, global bitwise research manager, said the company's proposal was informed by the SEC questions in the past.
"We spent the past year researching these questions and I am not looking forward to discussing these results with the SEC staff in relation to the filing and listing application," he added.
NYSE Arca will present the request to change the rules "in the next few days", the press release explained.
Image of the SEC headquarters via Shutterstock
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