Bitwise, the crypto index fund manager, has withdrawn their application to convert its futures fund to a Bitcoin and futures fund, according to a post by Bloomberg Intelligence analyst James Seyffart on Friday. The fund, known as $BITC, will continue to provide exposure solely to Bitcoin. The reasons behind this decision remain undisclosed.
Bitwise’s General Counsel Katherine Dowling informed the U.S. Securities and Exchange Commission (SEC) that the trust had decided against pursuing the amendment strategy, as stated in a letter dated September 22. However, the letter did not provide further details beyond its initial submission on August 10.
Seyffart noted that this development might not be significant yet. However, if Valkyrie, another crypto fund manager, also decides to withdraw its application for a similar amendment, it could indicate a larger trend or issue within the industry.
Simultaneously, the SEC has postponed its decision on several spot Bitcoin ETF applications as of August 31. The regulator stated it needed more time to review submissions from WisdomTree, VanEck, Invesco Galaxy, Wise Origin Bitcoin Trust (by Fidelity), and BlackRock (NYSE:).
Seyffart suggested that Bitwise may see limited benefits in having a dual Bitcoin and Ethereum ETF given potential delays in market entry compared to competitors. Also, Bitwise may have investors who prefer exposure solely to Bitcoin.
Previously, Bitwise had surprised the market by requesting to withdraw its application for the Bitcoin and ETH Market Cap Weight Strategy ETF, which it had filed with the SEC on August 3. This ETF was designed to invest in Bitcoin or Ethereum futures based on market capitalization. Concurrently, Bitwise is collaborating with ProShares for another ETF launch.
The next deadline for SEC decisions regarding these applications is slated for mid-October. However, further delays could push the decision to early next year, possibly around March, April, or May. Bitwise’s decision to focus exclusively on Bitcoin underscores the ongoing regulatory uncertainty surrounding cryptocurrencies in the United States.
The crypto community is keeping a close eye on news about crypto ETFs as the next deadline approaches. This attention was heightened when Gary Gensler, the chairman of the SEC, avoided directly addressing spot ETF approvals for cryptocurrencies during a U.S. Senate Banking Committee hearing on September 12.
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