SEC puts on hold decision on Bitwise Bitcoin ETP application

abdelaziz Fathi

The US Securities and Exchange Commission has delayed its decision on a spot bitcoin exchange-traded fund (ETF) proposal from by Bitwise Asset Management.

Per an official document published by the SEC, the new deadline to review the offer has been shifted, as the agency needs more time to review the potential rule change further. It also asked for public comments on aspects of the NYSE Arca’s “actual” Bitcoin ETF, named Bitwise Bitcoin ETP Trust.

A decision was expected no earlier than mid-December, 45 days from the time the applications for the fund was published in the federal register, but the SEC is yet to approve a single BTC exchange-traded fund.

Bitwise, a San Francisco-based firm, has filed its initial registration earlier in October, joining the race to launch a physically-backed bitcoin exchange-traded fund (ETF). The proposed fund would trade spot bitcoin instead of BTC futures, as most filings have recently sought to do. The Bitwise Bitcoin ETF Trust seeks approval to issue and redeem shares that trade on the NYSE Arca, Inc. stock exchange in blocks of 25,000 shares.

If approved, NYSE Arca, the exchange owned and operated by the ‎Intercontinental Exchange (ICE)‎‏,‏ would host the proposed listing while Bitwise Index Services will produce and manage the bitcoin ETF.

Bitwise made its first physical bitcoin ETF filing two years ago, which was later rejected by the US top watchdog, as were all proposals for physical bitcoin ETFs made around that time.

Bitwise global head of ETF products said earlier that he doesn’t think the SEC will be in a rush to approve a cryptocurrency-based ETF, but his company is excited to talk to regulators about what his firm has to offer.

Also in October, Grayscale Investments, a subsidiary of Barry Silbert’s Digital Currency Group, said it plans to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF.

There are a number of applications underway to get a bitcoin ETF listed, but so far none have been approved by the SEC. The agency only extended the deliberation window or opened the matter to public comments to avoid reaching any decision on a proposal, meaning today’s delay is no surprise.

SEC Chair Gary Gensler gave the greenlight to two bitcoin futures-based ETFs, leading to speculation that he could approve a spot vehicle. Fund managers were hopeful of a physically backed ETF, but regulated like a normal exchange-traded fund under a 1933 law.

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