Bitwise, one of several asset managers seeking to introduce Bitcoin spot exchange-traded funds (ETFs) in the U.S. market, has taken an unexpected step by withdrawing its application for the Bitcoin and Ethereum Market Cap Strategy Ethereum Futures Contracts (ETF). This application was initially submitted to the Securities and Exchange Commission (SEC) on August 3.
The sudden withdrawal of the Bitcoin and Ethereum Market Cap Strategy ETF application has raised eyebrows. While Grayscale’s recent SEC victory had boosted market confidence, Bitwise appears to be quietly reconsidering its approach. The withdrawal statement mentioned that the fund aimed to provide investors with capital appreciation, but it also noted that there were no guarantees of achieving this objective.
“The Trust no longer intends to seek effectiveness of the Fund and no securities of the Fund were sold, or will be sold, pursuant to the above-mentioned Post-Effective Amendment to the Trust’s Registration Statement.”
In its withdrawal statement, Bitwise provided limited details, stating, “The Trust no longer intends to seek effectiveness of the Fund and no securities of the Fund were sold, or will be sold, pursuant to the above-mentioned Post-Effective Amendment to the Trust’s Registration Statement.”
SEC’s Ongoing Delays
The SEC has been delaying its decision on various Bitcoin exchange-traded fund applications from multiple firms, including WisdomTree, Invesco Galaxy, Valkyrie, VanEck, BlackRock, Bitwise, and Fidelity. The commission has extended the review period for spot Bitcoin ETF applications from WisdomTree, VanEck, Invesco Galaxy, Bitwise, and Valkyrie, as well as Fidelity’s Wise Origin Bitcoin Trust and BlackRock’s Bitcoin ETF. The next set of deadlines for the SEC falls in mid-October, but these dates could be further postponed to the SEC’s third batch of deadlines in January, or the final decision dates in March, April, or May of the following year.
Bitwise, known for being among the early asset management firms to apply for Bitcoin ETF products, had proposed a BTC-backed ETF in January 2019. The ETF aimed to track the Bitwise Bitcoin Total Return Index, which derived its value from BTC transactions on various exchanges.
Moreover, Bitwise had planned to gather market data from multiple cryptocurrency exchanges to provide a reliable representation of the broader cryptocurrency market. The company had also intended to employ third-party custodians for the physical custody of Bitcoin.