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Bitwise files for new physically held bitcoin ETF with US SEC

Jan 11, 2019 04:33 am UTC

Cryptocurrency startup Bitwise Asset Management has proposed a new bitcoin exchange-traded fund (ETF) after conducting in-depth research for nearly a year.

The company explained that the proposed ETF differs from previously filed proposed bitcoin ETFs as it will rely on regulated third-party custodians to hold its physical bitcoin. In addition, the index will draw prices from several cryptocurrency exchanges, which would represent “the majority of currently verifiable bitcoin trading.”

Accordingly, Bitwise has filed an initial registration form with the U.S. Securities and Exchange Commission (SEC). It believes that it can provide the SEC with the type of information and data the agency has indicated it needs to fully evaluate bitcoin ETFs.

"The SEC has asked thoughtful and relevant questions about the quality of the crypto trading ecosystem, the reliability of crypto pricing, the strength of the arbitrage function in crypto and the robustness of crypto custody," said Matt Hougan, Global Head of Research, who oversees Bitwise's indexing efforts.

"We have spent the past year researching these questions and look forward to discussing those findings with the SEC staff in connection with the filing and listing application."

According to the official release, the Bitwise organization and Bitwise Investment Advisers, LLC, will act as sponsor of the proposed ETF. The fund would track the Bitwise Bitcoin Total Return Index, which is designed to measure the total return of an investment in bitcoin, inclusive of meaningful hard forks.

If approved, the ETF’s shares will be listed on NYSE Arca. The ticker symbol will be announced prior to commencement of trading.

The SEC has not approved any bitcoin ETF till date. The rejected bitcoin ETF applications include those proposed by Winklevoss twins, ProShares, Direxion and others.

Notably, the regulator has repeatedly delayed its decision on the bitcoin ETF application filed by money manager VanEck and blockchain startup SolidX, who proposed a physically backed model instead of a Bitcoin futures-based fund, according to Cointelegraph.

CoinDesk reported last month that the SEC pushed the deadline on the ETF decision to February 27, 2019.

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