The judgment day came earlier than expected for the Bitwise Asset Management’s application for a Bitcoin Exchange Traded Fund(ETF). The application has been rejected by the United States Securities and Exchange Commission, and they have done so because such a fund would lead to “manipulative acts and practices.”
The decision was made public and published in a 112-page document on 9th October. The regulator has decided to “disapprove” the proposed application, which was filed by Bitwise with NYSE Arca. The main reason behind this rejection is that the applicants failed to prove that the cryptocurrency market will be free from frauds and manipulation.
Bitwise’s rejection followed the same line of analysis that was used in the Winklevoss Bitcoin ETF application. The SEC stated that if the parties fail to prove that the exchange would be resistant to fraud and manipulation, they will have to enter a surveillance sharing agreement with the regulated market.
In this regard, Bitwise entered into a surveillance sharing agreement with the NYSE Arca. Bitwise and the team submitted several presentations to the SEC explaining the size of the real Bitcoin market and by comparing the price of Bitcoin with 10 “real” cryptocurrency exchanges. This comparison was made to prove to the SEC that the over 95% volume of the market is not fake and non-economic.
Bitwise kept a positive attitude towards this ruling as they focused on the work “disapprove.”After the decision, the crypto-asset management firm stated that this is a productive and first step in the journey towards something bigger and crypto-related. While fearing rejection, VanEck and SolidX pulled the Bitcoin ETF application just days before the decision; Bitwise was ready to wait for the decision.
An ETF would help the general public invest in cryptocurrencies, but the SEC will be on their toes, overseeing “all possible concerns.” There are positive signs that the SEC took time to review and understand every aspect of the report given by Bitwise. No matter what the decision is, Bitcoin ETF felt like a dream, and it looks like it will still be a dream.