New Bitcoin ETF Vying for SEC's Approval, but It Has One Major Problem

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Thu, 06/18/2020 - 08:30
Alex Dovbnya
A new Bitcoin ETF proposal filed by WisdomTree Investments gets cold reception on Wall Street
Cover image via stock.adobe.com
Contents

A new Bitcoin ETF proposal filed by New York-based asset management company  WisdomTree Investments is getting cold reception on Wall Street, according to a recent Bloomberg report.         

The main sticking point is that it actually offers exposure to Bitcoin futures instead of the physical asset.      

According to Steven Dunn of Aberdeen Standard Investments, this might not sit well with investors who might not even understand what they are getting.

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Broad-based exposure 

WisdomTree’s filing with the Securities and Exchange Commission (SEC) can invest up to five percent of its funds into CME’s cash-settled Bitcoin futures that were launched back in December 2017.

Bitcoin derivatives will comprise only a tiny fraction of the ETF’s basket of assets, which will also include a number of commodities such as crude oil, natural gas, and lean hogs. 

By offering this kind of diversification, WisdomTree wants to soothe concerns of the securities watchdog and increase its chances of getting the much-coveted approval.   

Analyst Todd Rosenbluth claims that the SEC is likely to reject an ETF proposal that exclusively deals with Bitcoin. 

The SEC has highlighted numerous concerns about Bitcoin ETFs directly, and is unlikely to approve something that explicitly tracks Bitcoin   

Clayton goes, ‘Crypto Mom’ stays 

Back in February, the regulator shot down the Wilshire Phoenix Bitcoin ETF proposal that wanted to offer a mixture of BTC and T-bills. This followed a string of other denials.

Because of his concerns over market manipulations, SEC Chairman Jay Clayton is not going to approve a Bitcoin ETF for the length of his term, which ends on June 5, 2021, according to cryptocurrency lawyer Jake Chervinsky.

Meanwhile, as reported by U.Today, SEC Commissioner Hester Peirce (a.k.a ‘Crypto Mom’), who publicly dissented from the agency’s decision to snub the Winklevoss'  ETF,  was recently nominated for a second term by U.S. President Donald Trump, which will allow her to remain in office until 2025.  

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.


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