US SEC Opens Commentary Period on Combined Bitcoin (BTC) ETF
The idea of a Bitcoin ETF has been in the proposition stage for years, but a new discussion period opens new hope.
Another potential Bitcoin (BTC) exchange-traded fund (ETF) is in the works, and the US Securities and Exchange Commission has opened a comments period to clarify the potential.
Wilshire Phoenix Fund may be able to offer shares to a combined ETF based partially on BTC and T-bills. The SEC has issued a rule change proposal to allow the listing of the shares on the NYSE Arca exchange, pending the 21-day comment period.
“The Exchange proposes (1) to amend NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares) to provide for issuance and redemption of such securities for the underlying commodity and/or cash, and (2) to list and trade the shares of the United States Bitcoin and Treasury Investment Trust under NYSE Arca Rule 8.201-E, as proposed to be amended,” suggested the SEC.
The announcement arrives at a time of increasing mainstream and potential institutional investment in BTC, as markets become more transparent and compliant. BTC derivative products are one way of getting exposed to the risk of price fluctuations. But an ETF also has to own and hold a certain amount of BTC.
Combining BTC with another low-risk asset has been a way to offset the criticism for extremely volatile prices. BTC is attractive for its rare, but dramatic rallies, which end up out-earning other asset classes through a short-term rally.
BTC has proven to be one of the most liquid assets, based on the activity of crypto-to-crypto exchanges. But BTC has enough fiat-based exchanges to offer price-setting mechanisms for derivative products. The current market for BTC futures takes its data from Gemini, Bitstamp, Kraken, and a handful of other fiat-based market operators.
The decision on the ETF commentary period means a final approval is still months away. Mainstream adoption for BTC is much more gradual. Recently, LedgerX received permission to become a contract creator and market operator for BTC derivatives.