The US securities and exchange Commission (SEC) has postponed its decision on the application to launch a traded exchange-traded Fund (ETF) for bitcoin from Wilshire Phoenix to February.
The regulator has rejected more than a dozen such applications over the past couple of years. The main issues raised by SEC representatives are possible market manipulation and trade supervision. However, Wilshire Phoenix says it can solve these problems.
As the founder and managing partner of the investment firm William Herrmann said, the peculiarity of the Wilshire Phoenix application is to create a trust with a lot of assets, which will allow hedging the risks of volatility of the first cryptocurrency.
In the event of a sharp increase in the volatility of the bitcoin exchange rate, the trust will automatically balance and reduce the share of the first cryptocurrency, increasing the number of us Treasury bonds. When the turbulent period in the cryptocurrency market passes, these bonds will be sold to increase investment in bitcoin.
The price of bitcoin will be calculated using the Chicago exchange’s CME CF BBR tool, which is based on the quotes of 5 American cryptocurrency exchanges – Coinbase, Kraken, itBit, Bitstamp and Gemini. According to Herrmann, these platforms provide most of the bitcoin trading with the US dollar.
It is unclear whether the SEC is ready to approve bitcoin ETFs, but the Commission is also considering other applications to launch such products. So, at the end of October, the corresponding application was submitted by Kryptoin Investment Advisors. Also in November, the deadline for consideration of the application from Bitwise and NYSE Arca was postponed.