Bitwise Asset Management, the leading crypto index fund manager in the United States, has filed Form 8-As for two new Ethereum futures ETFs, AETH and BTOP. These ETFs are scheduled to be listed and commence trading on Monday, October 2. Additionally, Bitwise has submitted amended registration statements for ETFs, AETH and BTOP.
Bitwise files for new Ethereum futures ETFs
Bitwise, a prominent U.S. asset management company, has submitted registration forms for two new products to provide crypto-based investment opportunities for individuals without direct exposure to physical cryptocurrencies. These products have been filed with the SEC through Form 8-As, which does not necessitate approval from the regulatory authority, unlike Bitcoin and Ethereum spot ETFs.
The Bitwise Ethereum Strategy ETF (AETH) will primarily invest in regulated Chicago Mercantile Exchange (CME) Ethereum futures, focusing on front-month contracts. The Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) will offer equal exposure to regulated CME Bitcoin and Ether futures. Bank of New York Mellon has been selected as the custody provider for both products, with a combined expense ratio of 0.85%.
Bitwise has also submitted an amended application for its spot Bitcoin exchange-traded fund, addressing concerns raised by the Securities and Exchange Commission (SEC) in their prior denial. The refined application systematically addresses eight key points of contention outlined by the commission.
One significant point of contention revolves around the reliability of Bitwise’s price discovery metrics. The SEC had previously noted potential inconsistencies due to the sporadic and asynchronous nature of the prices considered. The SEC interprets Bitwise’s acknowledgment of these limitations as an indication of potential bias in their approach.
In response, Bitwise argues that any bias introduced by the limited data reinforces their original argument, emphasizing that the influence of the CME Bitcoin futures market in price discovery is likely underestimated.
Still waiting for SEC verdicts
The U.S. Securities and Exchange Commission (SEC) has again postponed its decision on several proposals for spot Bitcoin exchange-traded funds (ETFs). That includes applications from financial heavyweights BlackRock and Invesco and cryptocurrency-focused Bitwise.
The delays, disclosed in filings on September 28, came earlier than expected, surprising many applicants who had anticipated responses from the securities regulator between October 16 and 19.
These delays are closely linked to the looming threat of a U.S. government shutdown, which could occur on October 1 if Congress fails to agree on various funding bills for government operations. The Congress must pass 12 separate full-year funding bills by the end of September to prevent this shutdown. Such an event would disrupt the functioning of various federal agencies, including financial regulators like the SEC.
The SEC’s decision to postpone the verdict on Bitcoin ETFs is part of a pattern, with a prior round of delays occurring in late August just as the initial deadlines approached. The third set of deadlines for these seven firms is slated for around mid-January, though there’s potential for further extensions. The SEC must come to a final decision by no later than mid-March.
Optimism regarding approving a Bitcoin ETF has been growing in recent months. In August, Bloomberg ETF analyst Eric Balchunas raised the likelihood of a spot Bitcoin ETF approval by the end of 2023 to 75%, up from an earlier estimate of 65%. This positivity was fueled by a decisive ruling in favor of Grayscale by the U.S. Court of Appeals Circuit over the SEC, indicating a more favorable environment for such approvals. Balchunas has even elevated the odds to 95% by the end of 2024.
Currently, the US SEC has not yet greenlit any Bitcoin spot ETF, citing concerns over clarity and investor protection.
