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SEC Reschedules Decision-Making on Bitcoin ETF Proposals

The Securities and Exchange Commission (SEC) in the United States once again delayedon deciding on the three Bitcoin exchange-traded fund (ETF) proposals according to the release of documents from the regulatory agency on Monday.

The three ETFs proposed earlier in the year include Bitwise Asset Management, VanEck/Solid X and Wilshire Phoenix filed with exchanges NYSE Arca and Cboe BZX. The proposed ETFs aimed to be the first investment vehicles based on Bitcoin.

The next decision on Wilshire Phoenix is scheduled for September 29, while the final decisions of Bitwise and VanEck/SolidX are expected on October 13 and October 18 respectively.

The regulatory agency has been putting off making decisions on the Bitcoin ETFs, referring to the concerns of “fraudulent and manipulative acts and practices” in crypto trading.

Back in May of 2019, Dave Nadig of ETF.com mentioned, “it is clear the SEC is still in information gathering-mode.”

In an attempt to address these concerns, Bitwise published multiple reports indicating the actual Bitcoin market is much smaller, more regulated, and better surveilled than expected.

Bitwise previously commented that the bitcoin market is “significantly smaller and significantly more efficient” than observed.

Bitwise’s ETF proposal has received support from several influential blockchain leaders, including Spencer Bogart from Blockchain Capital, Matthew Walsh from Castle Island Ventures, Sam McIngvale of Coinbase Custody, and Kristin Smith from the Blockchain Association.

VanEck, SolidX to Sell ‘Limited’ Bitcoin ETF to Institutions

While the United States Securities and Exchange Commission (SEC) once again delayed the decision regarding the Bitcoin exchange-traded funds (ETFs), the investment management firms are planning to sell a “limited version” to institutional investors on Sep 5th.

VanEck and Solid X revealed that they have a workaround to bypass regulatory issues and are using an SEC exemption that will allow their product to be offered to institutions such as hedge funds and banks, but not to retail investors.

An “unusual” arrangement is under the SEC Rule 144A allows the sale of privately placed securities to “qualified institutional buyers,” as reported by the Wall Street Journal.

Although the product is not a true ETF, it is similar. Head of ETF product of Van Eck, Ed Lopez mentioned that the offering “allows for shares to be created and redeemed like ETFs, but it is not an ETF.”

“Unlike an ETF it isn’t listed on a national exchange, rather it is quoted on the OTC Link ATS platform. This is a first-of-its-kind type of offering. Given it will trade over-the-counter via broker-to-broker transactions, we’ve been casually referring to it as a Broker Traded Fund, a BTF.”

VanEck and SolidX believe that this limited version will act as evidence that Bitcoin ETF can work.

Bitwise Recruits BNY Mellon as Transfer Agent for Proposed Bitcoin ETF

Bitwise has recruited the services of Bank of New York Mellon to act as the administrator and transfer agent for its proposed Bitcoin (BTC) exchange-traded fund (ETF).

On Wednesday, Bitwise amended its Bitcoin ETF S-1 form listing BNY Mellon as the administrator, transfer agent and ETF custodian. The amendment also listed Foreside Fund services as the marketing agent and Cohen & Co. as an auditor.

The above firms, however, must wait on the decision of U.S. financial regulators before they can assume their appointed roles. Bitwise has a short of history of delays and setbacks when dealing with the regulators but a final decision is expected by October 23 of this year.

Recently partnering with Bakkt to work on BTC futures, BNY Mellon has remained very active in the cryptocurrency space. Since 2015 it has worked on the development and integration of blockchain technology and currently holds over $33 trillion in assets.

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‘The SEC Has to Give its Decision: Yes or No’ to Bitcoin ETF Approval, says Bitwise

The Securities and Exchange Commission (SEC) previously set an Oct. 13 deadline for approving Bitwise Investments’ Bitcoin exchange-traded fund (ETF). With Bitcoin’s high volatility this year, its performance in 2019 remained bullish, although falling by over 20% in one week in September. Bitcoin reached its lowest level in July while hitting its high of over $11,000 in June 2019.

Matt Hougan, managing director and global head of research at Bitwise, is still optimistic about the prospects of getting his firm’s Bitcoin ETF approved. Hougan explained:

“Yes, we submitted a lot of research to the SEC and met with them multiple times. Just the evolution of the Bitcoin market is from night to day, and that’s why I think we’re closer than we have ever been before to getting a Bitcoin ETF approved.”

‘Custody has solved our problem in crypto’

Hougan mentioned the role of custody in the development of Bitcoin, “I’d say custody has really solved our problem in crypto right now. There are a large number of regulated, insured custodians with hundreds of millions of dollars of insurance in place.”

Hougan believes that the issue of market surveillance and market quality are areas people are going to focus on. The investment firm has done a lot of research on where the real nature of the Bitcoin market is. “People’s views of Bitcoin are often anchored a few years ago when it was a wild west.”

Extended research by the firm has shown that the market is truly efficient. The key is the growth of the regulated growth of the CME Bitcoin futures market, which is trading more than $200 million a day, which is around 20-30% of the Bitcoin spot market. This is a significant indicator because the SEC stated that “if there is a large, significant regulated derivatives market trading side-by-side with the Bitcoin spot market, that can solve the problem of market surveillance,” explained Hougan.

One of the most exciting wealth generation opportunities

“The opportunity that’s been taking place in crypto, Bitcoin, and blockchain today is one of the most exciting wealth generation opportunities in the world. You know that because Bitcoin is the single best performing asset over the last five years up about 2000%.”

Hougan explained that if the Bitcoin ETF is approved, users will have “safe, simple, secure” access to the wealth generation taking place in Bitcoin and crypto.

What are the alternatives for the SEC?

Hougan added, “sometime before Monday, the SEC has to give its decision: yes or no. They have no more ways to postpone it at this point. We will hear clearly between now and Monday what they think, and then, depending on what we hear, we’ll go forward from there. But it should be a very exciting week.

Bitwise expects the SEC to provide detailed guidance on which questions they think have been successfully answered, and which ones, if any, remain. The firm will then understand how close they are to the “goal line” if they are “all the way in” or “a few yards outside.”

US SEC Rejects Bitwise Proposal to List Bitcoin ETF

The United States Securities and Exchange Commission (SEC) has rejected a proposal filed by Bitwise Asset Management to list a Bitcoin (BTC) exchange-traded fund (ETF).

On Wednesday, the US SEC finally made a decision on the Bitcoin ETF filing by Bitwise and NYSE Arca, stating that the applicants did not meet the necessary requirements pertaining to possible market manipulation and illicit activities, and thus rejected the rule change.

The Sec offered the following explanation, “The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca has not met its burden under the Exchange Act and Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be designed to prevent fraudulent and manipulative and practices.”Bitcoin ETF Unwarranted Optimism

The response from the SEC appears to be in stark contrast to Bitwise’s Managing Director and Global Head of Research, Matt Hougan’s recent display of optimism on Oct.7 when he commented, “We’re closer than we’ve ever been before to getting a Bitcoin ETF approved.”

Hougan has been vocal in his belief that perceptions of Bitcoin have radically changed and seemed convinced that the firm’s chances to land approval for a physically-held Bitcoin ETF were good. Hougan had cited the significant growth in cryptocurrencies and the role of custody in the development of Bitcoin as evidence stating, “I’d say custody has really solved our problem in crypto right now. There are a large number of regulated, insured custodians with hundreds of millions of dollars of insurance in place.”

The rejection of Bitwise’s proposal is another episode in a series of setbacks and delays from the SEC. The regulators had previously postponed making a decision on the proposal until Oct. 13 along with two other ETF proposals by VanEck Solidex and Wilshire Phoenix.

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Sofi Launches Into Cryptocurrency Trading with Sofi Trading

The existence and relevance of Bitcoin and other cryptocurrencies have stirred interest from different businesses across various sectors. Over the past few years, those interested have seen several innovative strides, inventions and blockchain-based solutions that are bridging the gap between financial services and income accrual the world over.

A recent launch into blockchain was announced by Sofi, a financial service provider specialized in brokering stocks and promoting Exchange Traded Funds (ETFs). Sofi now has a trading inclusion through which cryptocurrency assets can be traded.

The cryptocurrencies in question are offered through Sofi Digital Assets, LLC. The Sofi Crypto trading debut is one of its kind in that it is the world’s first trading platform to incorporate Stocks, ETFs and Crypto all in one platform. Sofis new novel cryptocurrency trading service empowers prospective customers to:

1. Learn about the Sofi model for cryptocurrency trading no matter your skill level;

2. Protect their investment as SoFi secures all crypto holdings from fraud or theft; and,

3. Help bolster learning on the go while being open to risks and how to turn them into strength.

Offered with the announcement of the Crypto trading option on the Sofi network is a $25 bonus offer is up for grabs for every $10 first trading done on the platform.

The success of the Sofi Crypto trading initiative is contingent upon the over 800,000 investors using the platform as well as others that would key into the opportunities.

While this may seem like a long shot, it is better seen as a positive projection as these new innovations are what would drive many people into adopting cryptocurrencies and all these alternative financial offers in the near future.

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US SEC Reopens Rejected Bitwise BTC ETF For Review

The United States Securities and Exchange Commission (SEC) has announced that it will revisit and review its previous decision to reject Bitwise Asset Management and NYSE Arca’s filing for a Bitcoin (BTC) exchange-traded fund (ETF).

On Nov. 18, the SEC announced that the ETF filing from Bitwise Asset Management and NYSE Arca will return to review, following the October rejection for not meeting the necessary requirements.

The SEC initially rejected the Bitcoin ETF filing on the grounds that the applicants were unable to meet the necessary requirements pertaining to possible market manipulation and illicit activities in October.

However, now that the regulator has announced that it will take a second look at the proposal, any party or person may file a statement, either in support or in opposition to, the proposed action made in accordance to SEC, no later than Dec. 18, 2019.

The regulatory commission further highlighted that the order to disapprove the proposed listing of the ETF filing from Bitwise Asset Management and NYSE Arca will remain in effect pending the SEC’s review.

The major concern which has so far been cited by the SEC to evaluate crypto ETFs is whether the underlying market is resistant to market manipulation.

In its previous rejection the SEC the following explanation, “The Commission is disapproving this proposed rule change because, as discussed below, NYSE Arca has not met its burden under the Exchange Act and Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be designed to prevent fraudulent and manipulative and practices.”

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China is Expecting its First-Ever Blockchain Exchange-Traded Fund

Shenzhen is expecting its nation’s first exchange-traded fund (ETF) that will track blockchain-themed stocks as underlying assets.

Penghua Shenzhen Stock Exchange Blockchain ETF’s application was filed by the Chinese asset management firm, Penghua Fund. The Shanghai Securities News reported that the application was accepted by the China Securities Regulatory Commission (CSRC).

The proposed blockchain ETF aims to track the performance of Shenzhen-listed public stocks that own businesses in the blockchain industry.

The Shenzhen Stock Exchange also issued the Shenzhen Stock Exchange Blockchain 50 Index simultaneously. The report indicated that brokerage research stated that after the Shenzhen Stock Exchange launched the Blockchain 50 Index, there may be an increase of new blockchain index and related themed fund products launching in the future, broadening the opportunity for capital entry.

According to the report, if the application receives final approval from the CSRC, it would result in the nation’s first blockchain-themed ETF that is open to public investors.

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Bloomberg Predicts Bitcoin Price to Surge Past $20,000 in 2020, Doubling Last Year’s High

Bloomberg predicted in its recent report that Bitcoin’s price in 2020 could reach double of last year’s high of $14,000.

It further suggested that adoption is the primary Bitcoin metric, and Bloomberg takes a positive outlook on this end.

Looking at the trend during the previous Bitcoin halving event in 2016, the cryptocurrency seems to be mirroring the same trend and returning to its previous peak.

Bitcoin’s price has seen a 60% decline in 2014, and at the end of 2016, Bitcoin matched the peak in 2013. If Bitcoin chooses to follow the same trend as 2016, with a 75% decline in 2018, Bitcoin is headed towards $20,000, according to Bloomberg.

According to the report, institutional investors such as Grayscale, also known as GBTC has been consuming around 25% of the new supply.

Progressing towards the digital equivalent of gold

The coronavirus pandemic has been pushing Bitcoin’s maturity, says the report. Based on volatility readings, Bitcoin is gaining the upper hand, against the stock market. Bitcoin’s 260-day volatility measure is the lowest ever compared to the stock gauge.

As Bitcoin’s volatility is at its lowest-ever against crude oil, this indicates that the cryptocurrency is joining the mainstream and progressing towards the digital equivalent of gold. The graph below shows Bitcoin’s volatility is around 2x the Nasdaq. When Bitcoin’s price and index first crossed paths in 2017, it was closer to 7x.

Source: Bloomberg

In Bloomberg’s Crypto Outlook April 2020 report, Bitcoin’s transformation into a safe haven asset like gold was said to have been accelerated by the coronavirus disruption. Taking into account that Bitcoin’s on-chain indicators are remaining price supportive, the report reveals that the coronavirus appears to be accelerating Bitcoin’s performance much more than the broad cryptocurrency market.

Futures driving Bitcoin’s future

Bitcoin futures trading on the CME has seen favorable trends and are supportive of the price, according to Bloomberg. Increasing futures open interest and the stead price premium will reduce volatility even further and will drive the Bitcoin price up.

As Bitcoin was given the golden ticket has Bitcoin futures were being traded on a US-regulated exchange, while the Securities and Exchange Commission (SEC) on the other hand was reluctant to approve Bitcoin exchange-traded futures (ETFs).

COVID-19 may give Libra life

COVID-19 has highlighted vulnerabilities in the fiat world, and markets have been built on outdated technology. As the Fed is considering a digital dollar, Facebook’s Libra gets a bit of the spotlight, as Wells Fargo, Truist and U.S. Bank are looking for new tech upgrades.

The Libra Association recently welcomed Singapore’s state investor, Temasek Holdings. Temasek as a portfolio value of 313 billion Singapore dollars (roughly $219 billion), making it one of the more prominent backers of Libra.

SEC Adopts Expedited Public Listing Review Process—Blockchain ETFs Could Qualify

The United States Securities and Exchange Commission has voted to adopt rule amendments to expedite the review procedure for companies applying for public listing.

The Securities and Exchange Commission (SEC) announced on July 6, that it had voted to adopt rule amendments to establish an expedited review procedure for investment companies under the Investment Company Act. The new process could potentially include streamlining crypto and blockchain exchange-traded fund (ETF) applications and should provide more “certainty and transparency regarding the process” for these firms.

The regulators declared that the expedited review process will be available for applications that are substantially identical to two other applications for which an order granting the relief has been issued within three years of the date of the application’s initial filing. Additionally, the SEC also referenced a new internal procedure for applications that did not qualify for the new expedited review process.

“The application process under the Investment Company Act is an important component of our regulatory structure. The process provides economic benefits to fund shareholders, expands investor choice, and facilitates innovation in the asset management industry, all with a steadfast commitment to transparency and investor protection,” said SEC Chairman Jay Clayton. “The changes approved today will modernize and streamline this process, resulting in improved transparency, reduced costs, and a more efficient use of our staff’s resources.”

The SEC said the changes would be in effect 270 days after being published in the Federal Register.

Months to Days For Crypto ETF Review

The SEC has been notoriously opposed to approving Bitcoin ETFs, which has drawn the ire of those within its ranks. Wilshire Phoenix recently sought approval for its Bitcoin Exchange-Trade Fund, an application that was rejected by SEC in February 2020. The Exchange-Traded Fund proposed to hedge Bitcoin against US Treasury bills.

The SEC’s newly adopted amendments that will come into effect—mean that crypto and blockchain ETFs that have required an exemption from the regulators for their operations in the past could qualify for the new review process. However, the fund would need to file a third application “substantially identical” to others that were granted exemption within three years of the date of the application’s initial filing.

While traditionally the review process for a typical IPO application with the SEC entails three rounds of inquiries and lasts between one and two months. In the case of the expedited review, the Commission would provide a notification to the applicants within 45 days of the date of filing provided the company responds within 30 days.