January 11, 2019 | AtoZ Markets-On January 10th, Bitwise Asset Management, the crypto index funds provider applied to the US Securities and Exchange Commission (SEC) with a request to create a new Bitcoin exchange fund (ETF). Will the collaboration between the leading U.S. cryptocurrency regulation authority and the leading provider of rules-based exposure to the crypto assets space successful?
Bitwise’s Proposed Bitcoin ETF Differs from Others
The initial registration form of the company states that the proposed Bitwise ETF will track the Bitwise Bitcoin Index. As stated in the company's press release, the value of the above-mentioned index will be calculated on the basis of “bitcoin prices that the index provider receives from bitcoin price transactions occurring on cryptocurrency exchanges”.
According to the Bitwise representatives the new ETF offered by the crypto index fund provider differs from other Bitcoin-ETFs previously proposed. The new ETF uses prices on various crypto-exchanges to better represent the market and requires “adjustable third-party custodians” to store it.
Company CEO Stays Positive about Bitcoin ETFs Idea
John Hyland, a global chief executive of ETFs in Bitwise, in a recent press release, recalled that "having a regulated bank or trust company owning physical assets of the fund has been standard in accordance with the rules of US funds for the past 80 years." And now it's possible with Bitcoin, "he added. As was reported, in July, the index fund provider asked SEC to launch a crypto ETF, which tracks Bitwise HOLD 10 Private Index Fund of ten cryptocurrencies. At the moment, the decision from SEC on this issue is still not taken.
Recalling Bitcoin ETFs History
Standard ETF is a security that tracks an asset or group of assets which traded in the same way as stocks on an exchange. ETF value changes with the prices of the assets that make it up the. There are ETFs for natural resources, gold, shares of different tech companies.
According to SEC Bitcoin ETF works as a passive investment instrument or security which tracks the movement of such investment. In other words, Bitcoin ETF-s money in the market following the price of Bitcoin. Bitcoin ETF may consist of mixed cryptocurrencies or tied only to the price of Bitcoin. The idea of Bitcoin ETF-s first appeared in June 2016, when the Winklevoss brothers decided to create the first exchange investment fund for bitcoins, however not very successfully, as their preposition to SEC was postponed until unidentified period.
As was reported earlier this month in, Japanese Financial Services Agency (FSA) was considering idea of giving green light to the Bitcoin Exchange funds. The crypto-industry has long been waiting for approval by US regulators bitcoins or even crypto ETF since a number of companies have applied for the launch of such products in the country.
In December, SEC postponed its decision on Bitcoin-ETF by investment firm VanEck and blockchain-company SolidX on the Chicago Stock Options Exchange (CBOE), setting a new term for February 27, 2019. Also the same month, the SEC Commissioner recommended to the cryptocurrency supporters “not holding the breath” while waiting for Bitcoin-ETF, speaking at the Digital Asset Investment Forum in Washington.
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