SEC Invites Comments on Bitwise Bitcoin and Ethereum ETF Proposal

U.S. Regulators and the Proposal for Bitwise ETF

According to Cointelegraph, U.S. regulators are currently engaging with the public for comments on NYSE Arca's proposal to list a Bitwise exchange-traded fund (ETF) that combines both Bitcoin (BTC) and Ether (ETH). This noteworthy development follows a filing made on December 10, which is part of a series of applications related to cryptocurrency fund offerings.

Timeline of Events

Bitwise and NYSE initially submitted their application to the Securities and Exchange Commission (SEC) on November 26. The SEC is now making significant progress by soliciting industry feedback on this application. The proposed ETF aims to offer a spot cryptocurrency index fund designed to provide investors with a balanced exposure to the two largest crypto assets globally. This approach is seen as a user-friendly format to facilitate investment in cryptocurrencies.

Growing Interest in Crypto Index Funds

Industry experts suggest that cryptocurrency index ETFs are gaining traction among issuers, especially following the successful listing of funds that hold BTC and ETH earlier this year. Katalin Tischhauser, the head of investment research at Sygnum, emphasized that index ETFs represent a logical progression in investment options, enhancing efficiency for investors, much like how the S&P 500 is similarly purchased through ETFs.

Other ETF Proposals

On November 27, NYSE filed to list another Bitwise index ETF, the Bitwise 10 Crypto Index Fund, which aims to include a broader range of crypto assets to diversify investment options. Additionally, NYSE Arca has also sought SEC approval for listing the Grayscale Digital Large Cap Fund, proposed in an October 29 filing.

Inclusion of Other Asset Managers

This competitive landscape is not just limited to Bitwise; other asset managers, including Hashdex and Franklin Templeton, are also making their entry with proposed crypto index funds, signaling an expanding interest in crypto investment vehicles.

Political Landscape and Future of Cryptocurrency

In the larger context of U.S. leadership, President-elect Donald Trump has indicated his intentions to transform the United States into a leading hub for cryptocurrency by appointing crypto-friendly leaders to head financial regulatory bodies when he assumes office on January 20, 2025. This shift could have significant implications for the cryptocurrency market.

Departure of SEC Chair Gary Gensler

In November, SEC Chair Gary Gensler, known for his stringent regulatory approach towards cryptocurrency, announced his departure from the agency, aligning with Trump’s inauguration. Gensler's tenure, which began in 2021, was characterized by a tough regulatory stance, leading to over 100 actions against companies in the crypto industry.

Looking Ahead

With Trump's impending leadership, there appears to be a renewed push from issuers to list various proposed crypto funds, including index ETFs and those that offer staking options. This could usher in a new era of cryptocurrency investment in the United States, balancing regulatory oversight with innovative investment opportunities.