The SEC is currently looking at multiple Bitcoin ETF propositions. The latest submission is filed by Bitwise, as they seek to introduce an exchange-traded fund for cryptocurrency. Known as the HOLD 10 Cryptocurrency Index Fund, it will focus on a market-cap-weighted index of the top 10 currencies, rather than just Bitcoin.
Bitwise Tries a Different Strategy
Various ETF proposals pertaining to Bitcoin exist to date. Numerous companies want to offer this type of investment vehicle to their clients and new investors. It is now up to the SEC to determine if such a vehicle should be allowed. Previous proposals pertaining to Bitcoin ETFs have been rejected by the agency over the years.
The new proposal by Bitwise is a bit different. Rather than focusing just on Bitcoin, it uses a different strategy. Its HOLD 10 Cryptocurrency Index Fund is based on the index of the 10 cryptocurrencies with the highest market cap. Offering a basket of currencies is not new in the financial world. Most hedge funds provide exposure to a mix of Bitcoin and altcoins to make their offering more appealing.
The chances of Bitwise receiving approval are probably still slim. The SEC is not rushing to approve any cryptocurrency ETF anytime soon. Nothing has changed in the regulatory landscape across the US. Without any further clarification regarding the status of Bitcoin, any cryptocurrency will struggle for approval. At the same time, this new proposal sends a clear message to the SEC that attempts at launching a crypto-based ETF aren’t going away.
The SEC Has a Lot of Work
With numerous ETF proposals pending, the SEC has its work cut out for them. Bitwise is joining the proverbial queue in this regard. Every proposal can be seen as a sign of maturity associated with the cryptocurrency industry. Consumers, investors, and speculators demand convenient access to these markets.
Bitwise may have a slightly better chance of succeeding with its approval. Its first crypto index fund went live in November of 2017. While not registered with the SEC, it is still an appealing vehicle for accredited investors. It also confirms the company has a working business model. Its ETF proposal is completely separate from the existing index fund.
The coming months will be interesting for all cryptocurrencies. A potential SEC decision, global regulatory developments, and rising prices are all spurring renewed interest in this industry. Cryptocurrency is maturing in many different ways despite its relatively low overall market valuation.
Do you think Bitwise will get SEC approval? Let us know in the comments below.
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Author: JP Buntinx