Bitwise CEO hopeful of SEC approval of BTC ETF – Claims issues resolved


Bitwise CEO hopeful of SEC approval of BTC ETF – Claims issues resolved

The folks at Bloomberg UK recently interviewed Hunter Horsley, the CEO and head of research at Bitwise Asset Management along with Matt Hougan, Bitwise’s global head of research, to determine their views on the continuing delays by the SEC in approving any applications for a Bitcoin Exchange-Trade Fund (ETF). The Bitwise application decision was delayed again, this time out to mid-October, the last potential delay in a federally regulated 240-day maximum. Both executives claim that open issues have been resolved to their satisfaction, but the SEC may soon reach that conclusion on their own.

The SEC has blocked more than two dozen BTC ETF applications over the last few years, always citing problems with the Bitcoin market environment. Last November, we reported that SEC Chairman, Jay Clayton, was “uncomfortable” due to “risks of fraud and manipulation and the challenge of investor protection.” He has since expanded on these concerns by noting that regulatory oversight would improve current thinking, as would better monitoring software to detect potential price manipulation tactics and custody solutions that rival current institution-grade examples in the equity industry.

Progress has proceeded on all fronts, while the SEC has cracked down on Initial Coin Offering (ICO) related fraud, at least in the United States. Bitwise has also submitted a number of detailed research reports to the agency for its review related to the Bitcoin market to allay fears that the SEC has, since they believe that a great deal of the volume in the Bitcoin trading arena is dominated overseas and outside of their control.

Bitwise looked at volumes, and after stripping away what are known to be “fake” volume transactions, i.e., wash trading, bot trades, and other practices predominantly overseas, they determined that 95% of reported Bitcoin volumes were fake. Fortunately, the “real” BTC volume turned out to be U.S.-centric and concentrated within ten exchanges, where spreads were tightly managed, a sign that the market is truly working efficiently. The majority of these exchanges were also quasi-regulated, falling within the purview of money transmitter legislation that typically polices KYC and AML statutes.

Presently, there are three ETF applications on the SEC’s desk. The most recent of the tri-fecta is from Wilshire Phoenix, which has been delayed, as well, along with Bitwise Asset Management and VanEck/SolidX. The respective decision dates are now September 29, October 13, and October 18. Despite these delays, Horsley remains optimistic that substantial progress has been made in the industry to address every one of the SEC’s issues.

The Nasdaq has shared its market monitoring software with most all crypto exchanges in the U.S. Fidelity Investments is bringing its institution-grade custody services to Crypto-Land, which should set a new standard in that regard. Coinbase recently enhanced its custody services with the acquisition of Xapo Ltd, upping its institutional assets under management to over $9 billion. Lloyds of London has also created industry specific insurance policies to protect against theft and fraud, and Horsley also noted that Susquehanna, a global trading group, will be opening its platform to cryptos for its clients, initially trading Bitcoin futures, which will again enhance the market’s efficiency.

Europe has already witnessed the advent of crypto ETF type trading products, but until the U.S. market opens its door, there will always be a massive amount of untapped capital that cannot easily access the BTC market. Hougan explained to Bloomberg that:

A key aspect to a Bitcoin ETF in the U.S. is that it unlocks the financial advisor marketplace. So far crypto has focused mostly on retail investors […] or institutional investors […] Half the money in the U.S. is managed by financial advisors, and right now it’s very difficult for them to access that market.

More news about SEC and the BTC ETF withold below:


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Bitwise CEO hopeful of SEC approval of BTC ETF – Claims issues resolved

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