One of the 6 major entities that had filed for a Bitcoin ETF has submitted another application to the US SEC to pull out of the ETF race.
Coverage:
This Is Unexpected
The move Bitwise to withdrawal its ETF application with the SEC is unsettling to the Bitcoin community for obvious reasons. There haven’t been any major developments to warrant such a move. Even more stunning is the fact that just a few days earlier, Bitwise’s own Chief Investment Officer made a determined call for a the approval of all pending Bitcoin ETF applications.
Just this week, Grayscale won against SEC in a quest to convert its fund into a Bitcoin spot ETF. The US SEC was against that, but lost the court battle. That said, it’s a bit odd that Bitwise would want to withdraw its application especially at a time when others are winning – not to mention the involvement of other heavy-muscle entities like BlackRock in the ETF field.
For context, BlackRock has a pretty great record of having its applications approved. Out of the hundreds of applications its has made, only a handful (less than 5) have been turned down.
Is Bitwise Playing Down The Significance Of A Bitcoin ETF?
It’s still yet unclear what Bitwise’s end game is following the withdrawal, but it’s apparent that the entity doesn’t seem to place much weight on a Bitcoin ETF anymore. An excerpt from the withdrawal statement read:
“The fund aims to provide capital gains to investors. No assurance can be given that the fund will achieve its investment objective.”
It’s also not clear whether Bitwise will be submitting a new Bitcoin ETF application in the future. Interestingly, this comes as SEC moves to delay decisions on the ETF applications submitted BlackRock and WisdomTree.
Why ETFs Are Controversial
As the Bitcoin ETF race heats up, one thing is sure: It’s not just about any ETF. It’s especially about Bitcoin spot ETF. As a matter of fact, all the 6 applications submitted to the US SEC for evaluation are Bitcoin spot ETF applications.
The SEC has been largely reluctant to approve a spot ETF for years. However, it has gladly approved a number of Bitcoin futures ETFs for various platforms. The difference between these two types of ETFs is their reality – a spot ETF needs actual Bitcoin (in holding) to function. That’s very much unlike a futures ETF that deals with “paper” Bitcoin.
Still, it’s a bit baffling why SEC approves Bitcoin futures ETF applications while staying clear of Bitcoin spot ETF applications. This has left many investors with sentiment of uncertainty.
