NYSE Arca Exchange has submitted an updated application to list the Bitwise Bitcoin exchange-traded fund (ETF) Trust.
This revised application includes a detailed academic analysis to address the significant concerns raised by the Securities Exchange Commission (SEC) regarding spot bitcoin ETFs.
In the 40+ page Bitwise filing, the NYSE emphasized the SEC’s consistent reference to the “mixed” or “inconclusive” academic record as a benchmark for previous disapproval of the Bitcoin ETFs proposal.
The submission also highlighted the SEC’s approval of two bitcoin futures ETFs under the Securities Act of 1933 in 2022.
In granting these applications, the SEC determined that the Chicago Mercantile Exchange (CME) Group surveillance measures could effectively detect and address any attempts to manipulate the CME bitcoin futures market.
This also includes efforts to manipulate the price of proposed futures ETFs.However, Bitwise disagreed with the notion that the academic alliteration between spot and futures is mixed.
The exchange firmly asserted that there is a strong consensus among well-conducted studies indicating that the CME futures market takes the lead in influencing the spot market.
Bitwise also contended that trading a new spot bitcoin ETF wouldn’t significantly impact prices in the CME futures market unless it also substantially impacted prices in the spot market.
This is due to the strong connection and arbitrage relationship between the bitcoin futures and spot prices.
Matt Hougan, Bitwise’s Chief Investment Officer (CIO), took to X to express his skepticism about the SEC’s past rejections of spot Bitcoin ETFs.
Hougan further stressed that the Grayscale court win over the SEC is essential for the approval of applications.
“Given the Grayscale ruling, every spot bitcoin ETF filing is essentially in a waiting pattern, hoping the SEC reacts to the court ruling by approving spot bitcoin ETFs. That’s the happy case. The question is, what happens if the SEC appeals the court decision?” Hougan explained on X.
The CIO expressed Bitwise’s amended filing to clear up significant confusion around the growing academic records on price discovery in the Bitcoin market.
He explained that the revised application demonstrated that CME is as significant to spot as it is to futures ETFs.
While the SEC had previously rejected this logic, Greyscale’s recent court ruling may symbolize hope.
Will Bitwise Third Trial Stick?
Bitwise’s amended filing, submitted by NYSE Arca Exchange, is the latest attempt to seek approval of a spot Bitcoin ETF after two preceding tries. This also comes nearly a month after Grayscale’s ride over the SEC at the U.S. Federal Court of Appeal.
Grayscale’s victory prevents the SEC from rejecting spot Bitcoin ETFs under the reasons it has given in the past.
While crypto communities view the court ruling as a win for the digital asset landscape and investors, it doesn’t guarantee the approval of spot Bitcoin ETFs.
Nevertheless, Bitwise hopes approval may be on the horizon with its revised and detailed proposal, which comprehensively explains the “mixed” academic record between spots and futures ETFs.
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