Why did Bitwise Withdraw Its Bitcoin ETF Proposal from the SEC?

The long-awaited approval from the SEC on the Bitwise Bitcoin ETF proposal has eventually come to an end. Despite, the SEC didn't make its decision yet, Bitwise decided to withdraw its Bitcoin ETF proposal. Why did Bitwise withdraw its Bitcoin ETF proposal and will the firm refile a new proposal?

15 January, 2020 | AtoZ Markets – Bitwise first presented its ETF proposal together with NYSE Arca in January 2019. Bitwise has met with the SEC eight times, and the SEC had rejected the previous proposals of Bitwise. Matt Hougan, Bitwise's global head of research told last month that the company had submitted a new proposal of 500 pages.

However, before the SEC has provided its approval or rejection, Bitwise has now requested the withdrawal of its Bitcoin ETF proposal. Concerning the listing a physically-backed Bitcoin investment vehicle on NYSE Arca. Bitwise presented the withdrawal of the registration statement on Form S-1 on January 10, 2019.

Will Bitwise Refile the Bitcoin ETF Proposal?

According to a note presented Tuesday to US SEC, Bitwise said the withdrawal move is "consistent with the public interest and investor protection". Matt Hougan, Bitwise's global head of research stated: "We withdrew the application. it is a procedural step, and we intend to file our application at the appropriate time."

Hougan added that the firm is currently "working hard" to answer the questions the SEC posed in its 112-page response to its first filing: "We remain fully committed to developing a bitcoin ETF."

Bitwise has yet to determine the timelines for refiling. Earlier, Bitwise said it committed to providing all investors with access to bitcoin in a regulated and familiar fund format. Bitwise says its ETF proposal differs from previously-filed similar proposals. Since, the firm will now safeguard 100% of the holdings in cold stores with an institutional and regulated third-party custodian.

Read More: Bitcoin Rally 2020 Continues and BTC Price Targets $9500

Why Doesn't SEC Give Any Bitcoin ETF Approval?

In September, Cboe BZX Exchange also withdrew its VanEck / SolidX bitcoin ETF proposal after facing rejections. At the moment, Wilshire Phoenix's proposal for bitcoin and US Treasury bond ETF is the only pending proposal with the SEC. This pending proposal is expected to be settled on February 26, 2020.

Several companies have submitted bitcoin ETF proposals. However, none of the firms have yet received an approval from the SEC. Analysts believe that the SEC remains concerned about the Bitcoin ETF and the possible market manipulations. The SEC President Jay Clayton said that he did not see a path to a crypto ETF approval, until concerns about market manipulation are fully addressed.

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