US SEC receives another Bitcoin ETF proposal

By: Ali Raza
Ali Raza
Ali plays a key role in the cryptocurrency news team. He loves travelling during his spare time and enjoys… read more.
on Jun 18, 2020
  • The US SEC recently received yet another Bitcoin ETF proposal, this time by WisdomTree Investments.
  • Experts are already predicting another rejection by the regulator, as this proposal doesn't resolve old issues
  • The proposal does come with some innovations, such as offering an entire basket of different commodities.

The US Securities and Exchange Commission (SEC) has been receiving Bitcoin ETF proposals for years, now. Over the years, some of the proposals were even believed to be good enough for the approval, although the regulator always rejected them due to various flaws.

Now, yet another proposal was filed, this time by the asset management company from New York, called WisdomTree Investments. The company also announced plans to launch its own stablecoin earlier this year.

Experts already expect another rejection

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The new filing seems to be off to a bad start, as reported recently by Bloomberg. Many have commented that the filing likely won’t be approved by the SEC, due to the fact that it offers exposure to Bitcoin futures, rather than the physical asset.

One of the reasons why so many candidates have been submitting ETF proposals is the fact that they expect to attract institutional investors. Most of such investors do not really understand cryptocurrencies, and so the ETF would provide them with a more familiar way into the crypto business.

However, the ETF that offers exposure to Bitcoin futures is unlikely to sit well with the investors — or the regulator, for that matter.

The new proposal tries a different approach

From what is known, WisdomTree’s proposal can invest as much as 5% of its funds into Bitcoin futures launched back in 2017 by CME. However, WisdomTree also attempted to reduce the regulator’s concerns by adding an entire basket of different assets, alongside BTC futures.

In fact, the futures contracts would only be the smallest aspect of the basket, which would also contain numerous other commodities. Some examples include natural gas, crude oil, and alike.

Despite this, the popular opinion is that the SEC will reject this proposal, as well, as it doesn’t actually resolve any of the problems with Bitcoin ETFs that were highlighted in the past. One of the biggest ones is market manipulation, which was the main concern of the SEC Chairman, Jay Clayton.

The regulator has already rejected numerous proposals this year, starting with the one submitted by Wilshire Phoenix in February 2020.

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