Bitwise Challenges SEC Academic View on Bitcoin ETF

Bitwise Challenges SEC Academic View on Bitcoin ETF
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Crypto asset management firm, Bitwise, has recently submitted an extensive report to the United States Securities and Exchange Commission (SEC) regarding the academic research surrounding the Bitcoin (BTC) futures market. 

This move comes as part of Bitwise’s efforts to amend its existing application for a Bitcoin Exchange-Traded Fund (ETF) through NYSE Arca.

The Bitwise Position on ETF’s

In the comprehensive review, Bitwise delves into the intricate dynamics between the BTC futures market and the pricing of spot BTC. 

Notably, this analysis aims to provide the SEC with valuable insights into how these two facets of the cryptocurrency market are interrelated. Before now, the SEC has frequently referred to academic research on this topic as “mixed” or “inconclusive”, solidifying its basis for not approving a spot Bitcoin ETF product to date

As such, Bitwise in the amended filing highlighted the SEC’s consistent acknowledgement of the various viewpoints presented in the academic studies. The crypto asset firm emphasized that the SEC’s past disapproval orders have consistently raised concerns regarding these mixed academic opinions.

The BTC futures market has gained significant prominence in recent years as it allows investors to speculate on the future price movements of Bitcoin.

The Bitwise Position on ETF's

Bitwise’s report takes a closer look at the academic literature on this subject, shedding light on how futures trading can impact the valuation of the underlying asset, Bitcoin.

With the broad claim from the SEC hinging on the fact a spot Bitcoin ETF can impact the market in favor of manipulators, the Bitwise filing shows that the CME Futures Market currently outpaces the spot counterpart and as such, the latter cannot have a major impact as is being feared.

The Implication of Spot Bitcoin ETF Approval

Recall that the SEC has officially acknowledged and begun reviewing the application for a Spot Bitcoin ETF submitted by Bitwise. Although the SEC has not yet given its verdict on this product.

However, early this month, the American regulator once again postponed its decision on seven recent applications for spot Bitcoin ETFs, Bitwise’s application included. The SEC’s decision to extend the review period comes in light of a crucial court ruling favoring Grayscale Investments’ bid to convert its Bitcoin Trust into an ETF. 

Notably, if the Bitwise spot Bitcoin ETF is approved, it will allow for greater accessibility and participation from both retail and institutional investors. Additionally, the approval would set a precedent for other cryptocurrencies to be considered as viable investment options. This could potentially result in increased regulatory clarity and framework for other digital assets, making the overall cryptocurrency ecosystem more robust and secure.


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