Bitcoin

Bitwise Investment submits Bitcoin ETF proposal when SEC sends positive signals

Bitwise

Discussions about Bitcoin Exchange Traded Funds (ETFs) are heating up as the US Securities and Exchange Commission (SEC) appears ready to begin approving one or more funds. Bitwise Investment is the latest company to file a Bitcoin ETF application with the United States regulator.

In one tweet On October 14, CEO Matt Hougan said there was already a separate BTC futures-based Bitwise ETF filing, but this new one will actually contain BTC.

The company filed an application for the Bitwise Bitcoin Strategy ETF in September, joining a long line of proposals awaiting SEC approval.

Hougan believes that BTC funds are better than futures, and the reason is that it can cost 5-10% more per year to bring a futures contango to market. Contango is a situation in which the futures price of a commodity is higher than the expected spot price of the contract at expiration.

The CEO added that due to the rules, ETFs cannot hold 100% of the BTC futures, so 85% is the maximum which means they will be diluted with other assets. He also mentions “Tail Risk” as the possibility of a loss resulting from a rare event:

“An ETF based on Bitcoin futures comes with ~ 6-12% cost all, ~ 15% dilution and tail risk. Useful for certain investors, but not ideal. The BTC ETF avoids all of this directly. “

Possibility of admission (Bitwise)

According to Bloomberg Senior ETF Analyst Eric Balchunas, the SEC is poised to approve a Bitcoin futures product next week. Quoting insiders from the media giant, he says:

“Bitcoin futures ETFs have had no objection to the SEC, as confirmed by several sources that confirm this. Quite a lot has happened. I’m looking forward to the start next week. “

The ProShares Bitcoin Strategy ETF could be the first fund approved as the deadline ends on October 18th.

On October 14th, Ark Invest entered the ETF queue with an application for a fund investing in Bitcoin futures.

Bitcoin price responded positively, nearing the $ 60,000 mark in the past 24 hours.

Annie

According to Beincrypto

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Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.