U.S. SEC delays its decision on Wilshire Phoenix’s Bitcoin ETF until Feb.

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on whether it should approve Wilshire Phoenix’s Bitcoin ETF proposal yet again, and set Feb. 26, 2020 as the next evaluation date. The regulatory agency remains reluctant to accept any Bitcoin ETF, citing concerns about market manipulation and investor privacy as reasons for rejecting every ETF bid over the last two years. Wilshire Phoenix claims its fund’s structure, a trust that seeks an optimal balance between Bitcoin and U.S. Treasury bill exposure, accounts for these concerns as well as spikes in Bitcoin’s volatility.

Why it matters:

• The SEC is showing little interest in humoring those submitting Bitcoin ETF bids. The government agency continues to relay the same market manipulation concerns (though not without merit) when rejecting proposal after proposal, despite various efforts to limit exposure to price manipulation. However, recent developments suggest that structuring proposals as interval funds, one that allows investors to enter or exit positions only once per period (usually weekly, monthly, or quarterly) instead of ETFs might receive a better chance at winning approval. The reasoning behind this is ETFs are freely traded, and thus more exposed to manipulative efforts.
• The litany of SEC rejections is not discouraging all asset management firms. Bitwise Asset Management, whose Bitcoin ETF proposal was denied by in Oct., penned a letter to the SEC over the weekend confirming the firm’s commitment to creating a Bitcoin ETF. As to why Bitwise is doubling down on its efforts, the asset manager believes as interest in Bitcoin grows, U.S. investors need a safe and efficient way to gain exposure “with the protections offered by the federal securities laws.”