It would be hard to say that optimism prevails across the institutionalized Bitcoin trading space as yet another Bitcoin ETF goes under the scrutiny of the US SEC; this time the Wilshire Phoenix is hoping to be the one who changes the rules.
The SEC has faced multiple Bitcoin ETF applications dating back to the Winklevoss and their first application in late 2016. Each one of them has been turned down with the regulatory body open and clear about its concerns. The SEC is worried about market manipulation, liquidity, financial crime, and other issues, and these have yet to be adequately dealt with.
The Wilshire Phoenix ETF follows on from the VanEck SolidX Bitcoin ETF which many had high hopes for, but these hopes were dashed when the company decided to withdraw its application a month before the SEC was to make its final decision. The expectations of getting a Bitcoin ETF up and running now looks very slim.
Still, with a public filing yesterday, the SEC began proceedings to determine whether to approve or disapprove the proposed rule change, which would allow NYSE Arca to list and trade shares of Wilshire Phoenix’s Bitcoin and Treasury Investment Trust.
It is safe to say that the feeling of optimism around this application is also quite low as the SEC had invited the public to share its comments which were due 21 days from when the order was published in the Federal Register on July 1, and only six individuals had responded.
All but one of the comments were positive and pleading with the outlier being calling for a cautionary approach. However, the degree and detail of these comments ranged from well thought out and reasoned arguments to one comment that simply read:
“FOR GOD SAKE just approve this bitcoin etf — THIS IS BEEN GOING ON FOREVER…”
It would be highly surprising if the current crop of Bitcoin applications under the SEC has enough in them to change the minds of the regulators which have ongoing and valid concerns about the general shape and function of the market.
Wiltshire Phoenix is now under scrutiny, but the SEC is also fast approaching a deadline to approve or disapprove a bitcoin ETF proposed by Bitwise Asset Management in the middle of October.
The company has filed several reports with the SEC to convince the regulator that the bitcoin market is mature enough to support such a product. Recent comments from the SEC chairman, Jay Clayton, would seem to suggest the regulator’s position has not changed much.