Crypto ETF Application Withdrawn
In an unexpected move, Bitwise has submitted a request to withdraw its application for a Bitcoin and Ether Market Cap Weight Strategy exchange-traded fund (ETF) that was originally filed with the United States Securities and Exchange Commission (SEC) on Aug. 3.
The crypto community was bullish following Grayscale’s SEC victory, but Bitwise appears to be re-evaluating its strategy. The withdrawal of the ETF application was unexpected, and the filing stated, “The fund seeks to provide investors with capital appreciation. There can be no assurance that the fund will achieve its investment objective.”
Bitwise’s Chief Investment Officer Matt Hougan had recently advocated for SEC approval of all ETFs in a Bloomberg interview. The ETF was designed to invest in either Bitcoin (BTC) futures contracts or Ether (ETH) futures contracts, depending on market capitalization. Bitwise also collaborated with ProShares to launch another ETF around the same time.
In the withdrawal statement, Bitwise said:
Crypto ETFs and Web 3.0 Applications
The U.S. Securities and Exchange Commission (SEC) has postponed its verdict on Bitcoin ETF applications from WisdomTree, Invesco Galaxy, Valkyrie, VanEck, BlackRock, Bitwise and Fidelity. According to a SEC filing on Aug. 31, the commission has extended the period of time it will use to review Bitcoin ETF applications from WisdomTree, VanEck, Invesco Galaxy, Bitwise and Valkyrie, Wise Origin Bitcoin Trust proposed by Fidelity, as well as BlackRock’s Bitcoin ETF. The SEC’s next set of deadlines is in mid-October, but these may also be delayed to the SEC’s third batch of deadlines in January or to the final possible decision dates in March, April and May of next year.
Bitwise was one of the early asset management firms that applied to the SEC for Bitcoin ETF products. In January 2019, the firm proposed a BTC-backed ETF tracking the Bitwise Bitcoin Total Return Index, which is calculated based on the value of Bitcoin derived from BTC transactions taking place on crypto exchanges.
The company’s proposed Bitcoin ETF was designed to draw market data from multiple cryptocurrency exchanges in an effort to provide a reliable representation of the broader crypto markets. Bitwise also requires third-party custodians to physically hold Bitcoin.
Bitwise’s recent withdrawal is not its first. Earlier this year, the firm submitted an application for an Ethereum Strategy ETF that would invest in both front-time and back-time Ethereum futures. However, the asset manager withdrew its application after only one week.
Web 3.0 applications, such as the Apple Health application, are becoming increasingly popular. Crypto ETFs are one way to invest in digital assets, while crypto bear and bull markets provide great opportunities for traders. Reddit is often considered the best place to get crypto information. Circuits of Value crypto is another option for investors.
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