Crypto Asset Manager Bitwise Resubmits Bitcoin Futures ETF Proposal

• The proposed fund would use a Cayman Islands-based wholly-owned subsidiary.
• The SEC has given the go-ahead to numerous Bitcoin futures ETFs.

Bitwise, a leading cryptocurrency asset management firm, has resubmitted its ETF proposal to include Bitcoin futures (ETF). The proposed fund would use a Cayman Islands-based wholly-owned subsidiary to invest only in Bitcoin futures contracts.

Due to the high price tag and high complexity of the planned solution, Bitwise withdrew its application back in November. The original proposal submission occurred in September of last year. Bitcoin futures exchange-traded fund (ETF) was introduced by ProShares in October of last year. Not long later, Valkyrie debuted a product with comparable features.

Proposal During Tough Times

While the ProShares Bitcoin Strategy ETF (BITO) had massive initial interest in the week after its debut, it has since waned as cryptocurrency values have fallen sharply. After losing almost 70% of its value in its first year of trading, BITO is currently one of the worst-performing ETFs in history.

An exchange-traded fund (ETF) created by ProShares this year lets investors capitalize on falling bitcoin prices. While the SEC has given the go-ahead to numerous Bitcoin futures ETFs, it has yet to approve a spot-based product, citing recurrent worries about market manipulation.

The securities authority has rejected Bitwise’s request to launch a spot Bitcoin ETF. Grayscale, a Digital Currency Group subsidiary, has filed a lawsuit challenging the SEC’s proposal to transform the company’s Bitcoin trust into an exchange-traded fund (ETF).

Moreover, Katherine Dowling, chief compliance officer of Bitwise, would not rule out legal action against the SEC after it rejected the company’s Bitcoin ETF application. Regulatory uncertainty may be alleviated by litigation.