In the wake of BlackRock’s spot Bitcoin exchange-traded fund (ETF) application to the U.S. Securities and Exchange Commission (SEC) last week, two more asset management companies have filed the paperwork on their own spot Bitcoin ETFs.
First out of the blocks was New York-based investment firm WisdomTree, which has applied for its WisdomTree Bitcoin Trust to be listed on the Cboe BZX Exchange. This is WisdomTree’s third filing for a spot Bitcoin ETF, with the first two efforts being rejected by the SEC in December 2021 and October 2022 respectively.
The regulator denied the previous applications citing its now-standard concerns over fraud and market manipulation, but this latest filing offers to enter into a ‘surveillance sharing agreement’ with a U.S.-based BTC trading platform.
This is something that BlackRock’s recent application also included, stating that it intends to enter into such an agreement with the Chicago Mercantile Exchange (CME) futures markets. BlackRock cites a previous SEC approval of a bitcoin futures fund by Teucrium, which notes that the CME:
“…comprehensively surveils futures market conditions and price movements on a real time and ongoing basis in order to detect and prevent price distortions, including price distortions caused by manipulative efforts.”
Swiftly following WisdomTree’s filing came an application from Atlanta-based Invesco, which re-introduced its Invesco Galaxy Bitcoin ETF, first filed in collaboration with Mike Novogratz’s Galaxy Digital in September 2021.
Invesco has taken a somewhat different (although equally valid) line of argument in its defense. Namely that the lack of a spot Bitcoin ETF exposes U.S. investors to greater risks as they “are forced to find alternative exposure [to BTC] through generally riskier means,” noting that:
“…many U.S. investors that held their digital assets in accounts at FTX, Celsius Network LLC, BlockFi Inc. and Voyager Digital Holdings, Inc. have become unsecured creditors in the insolvencies of those entities.”
According to the filing, the SEC’s approval of Invesco’s spot Bitcoin ETF would therefore increase the protection of U.S. investors, which is basically the regulator’s entire remit in such matters.
An ETF is an investment vehicle which tracks the price movements of an asset (in this case the spot price of BTC), giving investors exposure without having to physically buy-in. Shares in the ETF represent ownership of the underlying pool of bitcoin held by the fund.
Whether any of this will persuade the SEC to finally approve its first spot Bitcoin ETF remains to be Observed.
