The US Securities and Exchange Commission is yet again accepting comments on a Bitcoin exchange-traded fund (ETF) proposal filed by investment management firm Wilshire Phoenix and NYSE Arca.
According to the public filing published on Oct. 15, both the companies filed an amendment to their ETF proposal earlier this month.
Per the proposal, Coinbase Custody will act as the custodian for the BTC held by the trust. Coinbase will further confirm the availability of the assets it holds within five business days of its monthly rebalancing, a detail not present in the first application.
Remember when ETFs were Approved for Gold
The proposal then moves on to drawing the SEC’s attention to the time when ETFs were approved for gold. The regulator focused on spot and futures markets although gold is traded in different market segments as well.
“Focusing on the spot market is appropriate because the spot market is the market to which the particular ETP would look to determine its [net asset value].”
As such, the same approach should be taken for Bitcoin ETFs, the document argues.
The filing also addresses SEC’s concerns about market manipulation in the cryptocurrency space.
“In connection with the Commission’s analysis of whether a market is inherently resistant to manipulation, the Commission has in certain circumstances focused not on the market as a whole but instead on the significant subset of the market that has a meaningful impact on the particular ETP [exchange-traded product].”
No Bitcoin ETF anytime soon
The updated application was filed on Oct. 4 that completely “replaces … and supersedes,” the previous one.
The comment period for Wilshire Phoenix's proposal was first kicked off by the SEC in June before it started evaluating the proposal in late September.
The members of the public need to submit comments within 21 days of the notice publication and the SEC has 45 days to make an initial decision.
Tuesday’s filing follows SEC rejecting VanEck and SolidX’s Bitcoin ETF proposal citing concerns about market manipulation. The company intends to refile the proposal in the future.
The concern, Todd Rosenbluth, CFRA’s senior director of ETF and mutual fund research says is not the ETF product but the underlying asset, “from a fraud standpoint” adding, “They don’t want to pull off that Band-Aid too quickly.”
“I don’t think we’re going to see a bitcoin ETF anytime soon because it’s hard for an asset manager like Bitwise and others to be able to disprove a negative,” Rosenbluth said.