Wilshire Phoenix says its Bitcoin ETF proposal is different than other firms

Wilshire Phoenix says its Bitcoin ETF proposal is different than other firms
Written by:
Michael Harris
8th November 2019
Updated: 11th March 2020
  • Wilshire Phoenix submitted a unique proposal for Bitcoin ETF to the U.S SEC.
  • Wilshire Phoenix to make a sizeable investment in Bitcoin and U.S Treasury Bills.
  • Wilshire's proposal is under review by the U.S SEC.
  • Wilshire aims at resolving the SEC concerns in hopes of getting approval for BTC ETF.
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Ever since the arrival of Bitcoin, the U.S Securities and Exchange Commission (SEC) received multiple proposals for Bitcoin ETFs. The SEC has rejected as many as 9 such proposals in a single day in May 2019. None of the applications have been successful in meeting the criteria set by the SEC for a Bitcoin ETF so far.

Wilshire Phoenix Files A Unique Proposal With The U.S SEC

As per the sources, however, firms have not lost all hope in Bitcoin ETFs. A relatively young, but a prominent name in the world of finance, Wilshire Phoenix, has recently filed a unique application with the SEC for a Bitcoin ETF. In its application, the firm has proposed a sizeable investment not only in Bitcoins but also in the U.S T-bills (treasury securities).

Wilshire Phoenix’s application is currently under review by the U.S SEC. The firm had previously proposed a partnership with NYSE Arca to establish United States Bitcoin and Treasury Investment Trust ETF earlier this year. William Herrmann, the managing partner and founder of Wilshire Phoenix expressed his optimism in a phone interview:

“Our proposed bitcoin-related ETF is quite different from those that have previously been submitted to the Commission for approval. To name just a few distinctions, the composition of the Trust is very different. Our Trust is a multi-asset trust (bitcoin and T-Bills), as opposed to just bitcoin”.

The U.S SEC has rejected proposals in the past citing concerns like increased exposure to risk for the investors and the novelty of the crypto market. In light of the stern stance of the SEC, many of the firms have withdrawn their applications in the past as well.

Wilshire Will Invest More In Treasury Bills In Times Of Increased BTC Volatility

Wilshire Phoenix aims at addressing such concerns with multiple mechanisms that make its proposal different from the ones that have been rejected earlier. For instance, the company will ensure automatic rebalance on a monthly basis that will help minimize the Bitcoin volatility. In times of increased volatility in Bitcoin, the firm will divert its investment more towards the treasury bills instead.

Herrmann has also announced his plan of making the index appear on Thomas Reuters and Bloomberg to keep the process entirely fair. Wilshire Phoenix is also expected to use the CME’s Bitcoin Reference Rate (BRR) to value the Bitcoin rather than developing its own method for pricing.

All in all, while the managing partner is optimistic about getting Wilshire’s BTC ETF approved, whether or not the U.S SEC considers the proposal sufficient to meet the requirements is yet to be seen.

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