Wilshire Phoenix Applies for Mixed-Risk Bitcoin (BTC) ETF
First intended for the fall of 2018, the ETF proposal was created in partnership with Coinbase.
Wilshire Phoenix, a New York asset management firm and partner to Coinbase Custody, has filed its exchange-traded fund (ETF) proposal with the US Securities and Exchange Commission (SEC). Thus, Wilshire Phoenix joins a long line of companies aiming to launch a Bitcoin investment product that would involve physical delivery and custody.
The narrative of an upcoming Bitcoin ETF drove price cycles in 2017 and 2018, but the series of rejections by the SEC dampened the optimism. The ETF sparks hopes of institutions buying physical BTC coins due to being assured of safe transactions and custody.
What is different about the Wilshire Phoenix ETF is that the shares would be a derivation of two types of assets - BTC and short-term US Treasury Bills or dollars. Mixing BTC with a much less volatile asset aims at creating a less risky investment product.
“While the Shares are not intended to, nor is their purpose to, replicate a direct investment in Bitcoin, they seek to provide investors with exposure to Bitcoin with substantially lower volatility than a direct investment in Bitcoin and without the uncertain and often complex requirements relating to acquiring and/or holding Bitcoin,” Wilshire Phoenix pointed out in its application statement.
The proposal comes at a time when BTC market prices are depressed again. The coin slid to $3636.08 as of 12:00 UTC on Thursday, with more than 64% of all trades happening in the pair with Tether (USDT). This specific trading profile creates fears that BTC markets are manipulated by wash or spoof trading and is one of the reasons for the previous ETF being turned down.
While 2019 sparked new hopes for approval of one of the multiple types of ETF, there are still skeptics who do not see this as having the potential to increase demand for BTC. The latest application arrives at a time when ETFs of all types are closing after a few boom years, research from ETF.com shows. These vehicles became popular for investing in precious metals, later expanding to other asset classes.