Bitwise, a San Francisco asset manager, is joining the race to launch a cryptocurrency regulated ETF (investment fund traded on the stock exchange), which, if approved, could help fight Bitcoin’s pricing.The company filed with the Securities and Exchange Commission on Tuesday (July 24) for a fund traded on a stock exchange that would track a set of 10 cryptocurrencies, including Bitcoin.
The US regulator has yet to approve a crypto-based ETF. Rumors that he could say yes to another request from fund manager VanEck and SolidX in August helped Bitcoin to surpass the US$8,000 mark this week.
“We’re getting in line,” said Matt Hougan, Bitwise’s global head of research. “The market is becoming professionalized in a direction that the SEC would allow for an ETF crypto in the market.”
Stock-traded funds generally track an index or group of assets, but trade as stock. While other companies, including VanEck, SolidX and Gemini, have only asked for ETFs with bitcoin, Bitwise is the first and only one to apply for one that tracks multiple digital assets.
In 2017, the SEC rejected a request from Cameron and Tyler Winklevoss, founders of the Gemini cryptocurrencies exchange. After VanEck and SolidX had their applications rejected, the two companies came together to file another version in June for an ETF to be called VanEck SolidX Bitcoin Shares. This version is under review, and rumors of its approval have boosted investor optimism and bitcoin’s 20% recovery this week.
Bitwise launched the first cryptographic index fund in November, which is not registered with the SEC. This index is technically a private placement vehicle, which excludes retail investors and is intended for investors who are accredited with at least US$1 million in liquid assets.
The SEC and other regulators have been hesitant to approve the bitcoin ETFs, primarily for security reasons. The agency repressed cryptocurrency-related fraud last year with a series of investor newsletters, stock trading suspensions and early stops at the coin offering.