Bitwise Makes 40-Page Addition to Its Spot Bitcoin ETF Application

Bitwise, an asset management firm, has updated its application for a spot Bitcoin exchange-traded fund (ETF) with the United States Securities and Exchange Commission (SEC). The 40-page addition follows after the regulator complained about the firm’s earlier proposal. That is as it pertains to using the CME BTC futures market for surveillance sharing.

It might be worth noting that Bitwise is one of many financial firms that the SEC continues to delay when it comes to considering their spot Bitcoin BTC ETF applications.

If anything, the SEC has disapproved several similar applications which, according to the agency, simply do not satisfy regulatory requirements.

Bitwise Submits Detailed Arguments that SEC’s Argument Are ‘Untrue’

In its amended application, Bitwise has attempted to engage the SEC on its view that there is an ‘inconclusive’ academic record on the relationship between BTC futures and spot markets. Contrary to the SEC’s view, Bitwise holds that there is sufficient evidence suggesting that CME is the leading source of price discovery.  The asset management firm based its argument on the academic works cited in 11 previous SEC disapproval orders for spot BTC exchange-traded products.

Meanwhile, recall that a court recently overturned the agency’s rejection of a Grayscale Investments application. Grayscale had been applying to convert its over-the-counter Grayscale Bitcoin Trust into a listed BTC ETF.

Now, however, Bitwise chief investment officer Matt Hougan believes that the chances of the SEC approving his company’s application might be dependent on the outcome of that particular case. In a thread on X (formerly Twitter), Hougan explains that there is a possibility that the SEC will seek redress and appeal the Grayscale ruling. If that happens, then Bitwise returns to the status quo, he noted. In conclusion, he wrote:

“We’re back to needing to prove that the CME bitcoin futures market leads price discovery over the spot market such that it can serve as a ‘regulated market of significant size’ for the purpose of surveillance.”

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