SEC To Review Another Bitcoin ETF, Why This Time is Different
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It’s Wednesday, June 17. If you’re new here— Ryze Recaps is a daily newsletter covering the top stories that Bitcoiners need to know in 2 minutes or less.
We’ve got a quick one for you today.
WisdomTree Proposes Bitcoin ETF
According to a recent SEC filing, WisdomTree Trust is looking to offer an ETF (exchange-traded fund) that invests a portion of assets in Bitcoin futures contracts. Along with energy, industrials, precious metals, and agriculture commodities, the ETF will also invest up to 5% of its net assets in CME Bitcoin Futures contracts.
Why it matters:
The market for CME’s Bitcoin Futures has been growing steadily, along with institutional interest in Bitcoin. Hedge funds and other asset managers are paying more attention to Bitcoin, and an ETF provides them with an easy, regulated way to gain exposure to the asset. More on institutional interest in Bitcoin from 5/29 and 6/1.
Previous attempts to launch a Bitcoin ETF by other firms were rejected by the SEC. The SEC is worried about the potential for market manipulation, and security concerns around holding actual Bitcoin in custody. However, previous filings were for ETFs that only invested in Bitcoin directly. The WisdomTree ETF is proposing to invest a small portion of assets into Bitcoin futures, not directly buying Bitcoin, which may ease some of the SEC’s concerns.
If the SEC approves this ETF, it may set precedent for more Bitcoin-related investment products to be approved in the future. This would further legitimize Bitcoin as an investment and truly open up the floodgates to institutional players.
That’s all for today! We’ll be back tomorrow with another Ryze Recap.