Bitwise Asset Management announced on January 10 that it is seeking to launch a physically held Bitcoin ETF and for this purpose, it has filed an initial registration statement on Form S-1 with the Securities Exchange and Commission (SEC).
How Bitwise’s Filing Differs From Previous ETF Proposals
The Bitwise Bitcoin ETF will be based on the Bitwise Bitcoin Total Return Index, produced by a subsidiary company, dubbed Bitwise Index Services, LLC.
While the ETF will include all the essential aspects that determine the value on traditional Bitcoin investments, it will come with two main distinctions from other Bitcoin ETFs.
All physical Bitcoin assets will be held by a third-party, regulated custody service, and the index will aggregate the prices from numerous cryptocurrency exchanges, which represent the majority of verifiable Bitcoin trades.
If approved, the new exchange-traded fund will be traded on the Chicago-based NYSE Arca Inc. under a ticker symbol that is yet to be determined.
The world’s leading ETP exchange in terms of market volume is expected to apply the necessary rule changes by filing a “Rule 19b-4” request to SEC, which will allow NYSE to list the ETF once the registration statement becomes effective.
Bitwise Has the Know-How to Deliver a Fully Regulated ETF
Bitwise Asset Management utilizes its decades of experience in ETFs and private funds, which enables it to address regulatory issues and comply with SEC’s guidelines.
The firm launched the Bitwise 10 Private Index Fund in 2017 and currently offers five crypto private funds to accredited institutional and private investors from the U.S. and abroad.
Bitwise is staffed with executives that have a solid background in ETFs. John Hyland, is a former CIO of United States Commodity Funds who participated in the launch of the first crude oil and natural gas ETFs, is now the Global Head of Exchange-Traded Funds at Bitwise.
Matt Hougan, currently Bitwise’s Global Head of Research, was previously the CEO of ETF.com, contributing to the development of the world’s first institutionally oriented ETF classification and rating system.
John Hyland said:
“While there can be no assurance that the 19b-4 application will be granted or the SEC will review and ultimately accelerate the registration statement, we are optimistic that 2019 should be the year that a bitcoin ETF launches … 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.”
Matt Hougan stated:
“The SEC has asked thoughtful and relevant questions about the quality of the crypto trading ecosystem, the reliability of crypto pricing, the strength of the arbitrage function in crypto and the robustness of crypto custody. 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.“