The NYSE Arca Exchange has presented a revised proposal to introduce the Bitwise Bitcoin ETF Trust.
The modified application incorporates an extensive academic evaluation in response to major concerns flagged by the Securities Exchange Commission (SEC) about spot bitcoin ETFs.
In the comprehensive 40+ page document from Bitwise, NYSE accentuated the SEC’s frequent mention of a “varied” or “ambiguous” academic history as a reason for prior rejections of the Bitcoin ETF initiatives.
The updated proposal also underscores the SEC’s green light for two bitcoin futures ETFs as per the Securities Act of 1933 in 2022.
While approving these requests, the SEC acknowledged that surveillance mechanisms of the Chicago Mercantile Exchange (CME) Group were robust enough to spot and tackle potential manipulations in the CME bitcoin futures arena.
Additionally, there were concerns about attempts to manipulate the pricing of proposed futures ETFs. Yet, Bitwise challenges the idea that the academic correlation between spot and futures is inconsistent.
The exchange confidently stated that well-researched studies overwhelmingly suggest that the CME futures market predominantly influences the spot market.
Bitwise further argued that launching a new spot bitcoin ETF wouldn’t markedly affect the CME futures market prices unless it similarly influenced the spot market rates.
This stance stems from the tight linkage and arbitrage dynamics existing between bitcoin futures and spot valuations.
Matt Hougan, the Chief Investment Officer (CIO) at Bitwise, voiced his reservations on X regarding the SEC’s previous denials of spot Bitcoin ETFs.
Hougan emphasized the pivotal role of Grayscale’s legal triumph against the SEC for the greenlighting of applications.
The CIO pointed out that Bitwise’s updated submission was aimed at resolving misunderstandings surrounding the increasing academic data on Bitcoin price determination.
He illustrated that the updated proposal underscores the CME’s equal importance to both spot and futures ETFs.
Although the SEC had earlier dismissed such reasoning, the recent court decision in favor of Grayscale might hint at a more optimistic outlook.
Will Bitwise Third Trial Stick?
The latest submission of Bitwise’s revised filing by NYSE Arca Exchange marks their third attempt to gain approval for a spot Bitcoin ETF, following closely on the heels of Grayscale’s significant win against the SEC at the U.S. Federal Court of Appeals.
This triumph for Grayscale means that the SEC can no longer reject spot Bitcoin ETFs based on their previous reasons.
While the crypto community hails this court decision as a milestone for digital assets and their investors, it doesn’t automatically assure the sanctioning of spot Bitcoin ETFs.
However, with its in-depth and updated submission, Bitwise remains optimistic, hoping that their clarification on the “mixed” academic interpretations concerning spot and futures ETFs might bring them closer to an endorsement.