US financial watchdog delayed decisions on the two ETFs that would allow more direct exposure to Bitcoin until early February.
Ana Grabundzija · December 18, 2021 at 4:30 pm UTC · 2 min read
The United States Securities and Exchange Commission (SEC) recently issued two deadline extension notices–postponing decisions on Bitcoin exchange-traded fund (ETF) proposals by Bitwise and Grayscale.
On October 14, after almost two years since its first attempt, Bitwise Asset Management filed for approval of a physically-backed Bitcoin ETF with NYSE Arca.
The following week, on October 19, Grayscale Investments, filed for approval to convert the company’s flagship product, Grayscale Bitcoin Trust (GBTC), into a Bitcoin Spot ETF.
Deadline extension notices
“The Commission considers it appropriate to designate a longer period for taking action regarding the proposed rule change so that it has sufficient time to consider the proposed rule change and the comments received,” read both notices.
The Commission postponed its decision to “either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved for the 45-day period,” which in the case of Bitwise Bitcoin ETP Trust means until February 1, and in the case of Grayscale Bitcoin Trust’s Bitcoin ETF until February 6.
Bitwise first applied for a Bitcoin ETF in January 2019, but was rejected by the SEC. The regulator kept the rejection review on standby, until, finally, Bitweis pulled the proposal in early 2020.
Last month, Bitweis withdrew its application for a Bitcoin Futures ETF.
However, the company launched a Crypto Industry Innovators ETF in May, allowing investors exposure to some of the major publicly listed firms in the blockchain and crypto industry.
The world’s first crypto industry ETF surpassed $100 million in assets under management in less than six months, Bitwise announced last month.
Just recently, Bitweis launched another world’s first investment product– an NFT index fund, offering diversified exposure, while tracking an index of the most renowned NFT collections.
JUST IN: Bitwise launching an NFT Index Fund. Cryptopunks earn the highest weighting at 37% followed by Bored Apes at 30%. Here’s the Top 10 as well as @Matt_Hougan thread on it https://t.co/Hyjl3WUz89 pic.twitter.com/hEjxspn9zR
— Eric Balchunas (@EricBalchunas) December 16, 2021
The Bitwise Blue-Chip NFT Index Fund holds the 10 most valuable NFT collections by market cap, including CryptoPunks, Bored Apes, and Fidenza, to name a few.
“And yes, now they have NFT index funds and yet STILL NO SPOT BITCOIN ETF,” commented Eric Balchunas, Senior ETF Analysts at Bloomberg, on Twitter.
SEC on the fence
Following the SEC rejecting a physical Bitcoin ETF by VanEck, Grayscale Investments attorneys issued a letter to the SEC, stating that the regulator is violating the Administrative Protections Act (APA) by discriminating against Bitcoin spot ETFs.
In the letter, Grayscale claimed that the Commission’s approval of Bitcoin futures-based ETFs, but not Bitcoin spot-based ETFs is “arbitrary and capricious.”
Earlier this year, the SEC showed readiness to greenlight Bitcoin futures ETFs, which don’t directly own Bitcoin, and are not tied to the spot price, but are based on futures contracts, hence tracking the future price of the asset.
A spot ETF would allow investors to trade on the current price of Bitcoin, hence offering more direct exposure, but thus far, the SEC remains on the fence.
As a consequence, earlier this month, Fidelity, one of America’s most prominent names in investing decided not to wait around for the regulator and took its Bitcoin spot-based ETF to Canada.
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