Bitwise, the asset management company, has taken a surprising step by retracting its application for the Bitcoin and Ether Market Cap Weight Strategy exchange-traded fund (ETF) that was initially submitted to the U.S. Securities and Exchange Commission (SEC) on August 3rd.
Despite the recent optimism in the market due to Grayscale’s victory with the SEC, Bitwise seems to be reconsidering its approach.
The withdrawal of the ETF application was unexpected, with a statement in the filing indicating that the fund’s objective was to provide capital appreciation but with no guaranteed outcome.
Matt Hougan, the Chief Investment Officer of Bitwise, had recently voiced his support for SEC approval of all ETFs in an interview with Bloomberg.
The ETF in question had planned to invest in either Bitcoin futures contracts or Ether futures contracts, based on their respective market capitalizations.
Bitwise had also joined forces with ProShares to launch a similar ETF around the same period.
Bitwise clarified in the withdrawal statement that the Trust no longer intended to pursue the effectiveness of the Fund, and no securities had been or would be sold in relation to the mentioned Post-Effective Amendment to the Trust’s Registration Statement.
The SEC has postponed its decisions on Bitcoin ETF applications from various firms, including WisdomTree, Invesco Galaxy, Valkyrie, VanEck, BlackRock, Bitwise, and Fidelity.
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As per a filing dated August 31st, the commission has extended the review period for spot Bitcoin ETF applications from WisdomTree, VanEck, Invesco Galaxy, Bitwise, and Valkyrie, along with Fidelity’s Wise Origin Bitcoin Trust and BlackRock’s Bitcoin ETF.
The upcoming SEC deadlines are scheduled for mid-October, but there’s a possibility of further delays to the third batch of deadlines in January or the ultimate decision dates in the subsequent months.
Bitwise had been among the early firms to apply for Bitcoin ETFs with the SEC.
Their initial application in January 2019 aimed to launch a BTC-backed ETF tied to the Bitwise Bitcoin Total Return Index, calculated based on Bitcoin values from exchange transactions.
The proposed ETF was designed to aggregate data from multiple cryptocurrency exchanges, offering a reliable representation of the broader cryptocurrency market.
Additionally, the company intended to have third-party custodians responsible for physically safeguarding the Bitcoin.
This isn’t the first time Bitwise has withdrawn an application.
Earlier this year, the firm submitted an application for an Ethereum Strategy ETF targeting both front-time and back-time Ethereum futures but withdrew it just a week later.
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