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SEC Delays Decision On Yet Another Bitcoin ETF

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SEC Delays Decision On Yet Another Bitcoin ETF

When it comes to bitcoin exchange traded funds, seemingly the holy grail of the bitcoin universe, if there's one thing the Securities and Exchange Commission is adept at, it's at delaying decisions on these products.

What Happened

On Tuesday, the SEC postponed a decision on a filing by Wilshire Phoenix to launch a bitcoin ETF. The commission put off a decision on that product for another 35 days, but if precedent is any guide, that decision could be delayed into 2020.

The proposed Wilshire Phoenix product would provide access to bitcoin while holding U.S. Treasuries, presumably to damp some of the volatility associated with cryptocurrencies. The only bitcoin ETF proposal left for the SEC to consider is one by Bitwise Asset Management, a provider of cryptocurrency indexes and funds.

The SEC is expected to render a decision on that fund next month, but again, if precedent is an accurate guide, ruling on that fund will be delayed.

Why It's Important

News of the postponed verdict on the Wilshire Phoenix offering comes less than a week after ETF issuer VanEck and fintech firm SolidX withdrew plans for their VanEck SolidX Bitcoin Trust.

If there's a glimmer of hope for the Wilshire Phoenix fund, it's that “the SEC has begun evaluating the proposed rule change to allow NYSE Arca to list and trade shares of Wilshire Phoenix’s Bitcoin and Treasury Investment Trust. The companies first filed the rule change proposal in May,” according to CoinDesk.

The rule in question is NYSE Arca Rule 8.201-E(c)(1).

That provision “currently states that Commodity-Based Trust Sharesare issued by a trust in a specified aggregate minimum number in return for a deposit of a quantity of the underlying commodity, and may be redeemed in the same specified minimum number by a holder for the quantity of the underlying commodity,” according to the SEC.

What's Next

The Bitwise bitcoin ETF differs from rival plans because the firm is pledging to use regulated third party custodians to hold its physical bitcoin and an index that derives pricing from multiple crypto exchanges. Earlier this month, the firm said it will use BNY Mellon as the administrator and ETF custodian.

A decision on that product is expected on Oct. 13.

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