An S-1 filing has been submitted to the American Securities and Exchange Commission (SEC), seeking the approval of a Bitcoin-laced exchange-traded fund (ETF).
Take A Walk On The Less Volatile Side
The filing in question was registered by Wilshire Phoenix, an investment management agency headquartered in New York.
In order to dilute much of the volatility associated with capital allocations towards crypto assets, Wilshire has declared that their proposed vehicle will consist of U.S. Treasury Bills, U.S. Dollars, and Bitcoin. This amalgamation is intended to provide investors with an augmented crypto-investment product, which provides and promotes enhanced stability.
As stated in the multi-page filing, it was suggested that although the trust isn’t intended to replicate direct investment into Bitcoin, the firm is aiming to supply investors with:
“Exposure to BTC with substantially lower volatility than a direct investment in BTC, and without the uncertain and often complex requirements relating to acquiring and/or holding BTC.”
Joinin’ The Club
Wilshire Phoenix is joining a reputable list of financial management entities that are bidding to secure the SEC’s green light regarding Bitcoin-related ETFs.
Most recently, San Francisco-based Bitwise Asset Management also filed an S-1 form to the SEC, with the intent to launch an exchange-traded fund that includes physically-held BTC.
However, getting regulatory incumbents to approve the issuance of shares of crypto-centric exchange-traded funds seems to be momentously difficult.
The Japanese Financial Services Agency (FSA) recently quashed rumors that the government entity had plans to approve cryptocurrency ETFs. In an interview, a spokesperson for the FSA was quoted as saying:
“There is no such fact that we are considering approving ETFs which track crypto-assets at present… we are not currently considering approving them.”
Wilshire Phoenix’s ETF application may be deemed as overly-optimistic by some, with government-based financial agencies seemingly becoming ever-more reluctant to approve such financial products. However, the accumulation of such applications by multiple well-respected financial firms may compound, and eventually push the SEC and other global agencies to seriously consider the approval of digital asset-based funds.
ETFs To The Rescue?
After a tumultuous 2018 for BTC the broader cryptocurrency & blockchain ecosystem, 2019 already appears to be a positive year for this revolutionary fintech innovation, along with its constituents.
In spite of the decision by NYSE-linked Bakkt to delay its in-house, physically-backed BTC futures – originally slated to go live by January’s end – technical analysis seems to be pointing to a potential trend reversal for the world’s first cryptocurrency.
The chart below was constructed by researchers at markets analysis group, Delphi Digital.
As previously reported, the New York research team is anticipating for Bitcoin to find a price bottom during the first quarter of 2019, citing that many upcoming events, such as prospective ETF approvals, may act as catalysts for change in market action, which in turn would “propel Bitcoin prices higher.”
I have no doubt that the approval of crypto-linked ETFs, specifically by governmental financial authorities, will give a much-needed boost to the nascent digital asset markets. And I’m not alone in touting this belief.
Many crypto commentators, analysts, and pundits are suggesting that copious amounts of institutionally-sourced dollars will be required to improve market conditions, to precede a rally.
A boost to the markets may also be caused by government banks, who are looking at BTC investments, according to Nick Szabo.
Via a recent report, the crypto-pioneer (who is also rumored to be Satoshi Nakamoto), claimed that government-backed banks will soon seek to replace their gold holdings with Bitcoin. The intangible nature of the flagship cryptocurrency, frequently labeled ‘gold 2.0’ would be perceived as a huge benefactor. According to Szabo, gold is “physically vulnerable,” which is leading banks to explore alternative stores-of-value.
Do you think the SEC will approve a Bitcoin ETF any time soon? Do you think the approval of said exchange-traded funds will cause a price rally across the crypto markets?
Let us know your thoughts in the comments 🙂
Title Image Courtesy of Luca Bravo on Unsplash