In a surprising turn of events, Bitwise, one of the prominent cryptocurrency index fund managers, has withdrawn its application for the Bitcoin (BTC) and Ethereum (ETH) Market Cap Strategy exchange-traded fund (ETF) from the United States Securities and Exchange Commission’s (SEC) Division of Investment Management.
This came on the heels of the Bitwise application being acknowledged on August 15. What is more surprising is that, on August 31, Matt Hougan, Bitwise’s Chief Investment Officer urged the SEC to greenlight all Bitcoin spot ETFs.
As per the recent Bloomberg interview, Hougan highlighted the advantages of approving multiple ETFs simultaneously for market participants while challenging what he perceived as the SEC’s unfair and politically motivated motives. He stated,
“I will say on behalf of investors, the best outcome is likely to line up multiple ETFs and allow them to launch at once.”
Bitwise Triggers Speculations in the Crypto Community
Despite the assertion, Bitwise has filed to withdraw its Bitcoin and Ethereum Market Cap Strategy ETF application, raising questions about their motivations and potential concerns regarding SEC scrutiny. The filing emphasized the fund’s objective of providing investors with capital appreciation but did not guarantee achieving this goal. The withdrawal statement read,
“The Trust no longer intends to seek effectiveness of the Fund and no securities of the Fund were sold, or will be sold, pursuant to the above-mentioned Post-Effective Amendment to the Trust’s Registration Statement.”
Nevertheless, the primary reason behind Bitwise’s decision to withdraw the Bitcoin and Ethereum Market Cap Strategy remains a mystery. that has baffled investors and the broader crypto community. Even though the news may be disappointing in the crypto community, they are not surprising.
Bitwise filed an application for an Ethereum Strategy ETF earlier this year that was designed to invest in both front-time and back-time Ethereum futures. However, the asset manager withdrew the ETF just a week after the filing.
SEC Delays Decision on Bitcoin ETFs
The development comes after the SEC postponed its decision on six applications for spot Bitcoin exchange-traded funds (ETFs), submitted by WisdomTree, VanEck, Invesco Galaxy, Bitwise, Valkyrie, and Fidelity’s Wise Origin Bitcoin Trust. The SEC now has an additional 45 days, extending its decision-making timeline until October.
Yet, these could also be postponed to January or even as late as March, April, or May of the following year as the SEC retains the discretion to approve, deny, or further delay a decision regarding these Bitcoin ETF applications.
The American regulator’s decision to extend the review period comes in light of a crucial court ruling favoring Grayscale Investments’ bid to convert its Bitcoin Trust (GTBC) into an ETF. The Federal court ruled that the SEC was wrong to reject Grayscale’s proposed bitcoin ETF without explaining its reasoning.
The shadow government in D.C. is out of control & the federal courts are our *only* remaining line of defense against the unlawful rogue behaviors of 3-letter government agencies. This decision is strong and clears a path to keep Bitcoin & blockchain innovation in the U.S.… https://t.co/FsykKyQEVG
— Vivek Ramaswamy (@VivekGRamaswamy) August 30, 2023
The Grayscale victory managed to catapult confidence within the crypto community, especially in the United States. Several prominent individuals along with lawmakers lauded the win, reiterating the decision will help Bitcoin (BTC) and blockchain innovation to grow. On August 30, US presidential candidate Vivek Ramaswamy took to X, noting,
“This decision is strong and clears a path to keep Bitcoin & blockchain innovation in the U.S. instead of overseas,”