SEC has postponed making a decision on a Bitcoin and U.S. Treasury bond ETF Wilshire Phoenix
The story of the SEC and the decisions for the Bitcoin ETF has consumed a lot of ink in the press. After announcing a review of Bitwise and NYSE Arca’s review of licensing arrangements for the ETF, the SEC recently went on to suggest that the Bitcoin US Bond ETF of Wilshire Phoenix is in limbo.
The SEC will continue evaluating the proposal, which was first filed earlier this summer, setting Feb. 26, 2020 as its next decision date to approve or reject the ETF proposal
Wilshire Phoenix’s Bitcoin ETF will be rescheduled for 2020
According to the latest announcement, The Securities and Exchange Commission (SEC) proposed with Wilshire Phoenix’s ETF proposal. The committee delayed the decision regarding an ETF, including US Treasury bonds and Bitcoin. If allowed, this would be the first ETF to link US bonds to a digital asset like Bitcoin.
Therefore, before this critical decision, the SEC needs time to evaluate more about the proposal as well as detailed research. Most likely, they will require Wilshire Phoenix to add some additional regulatory documents. And of course, the deadline for the SEC’s decision rescheduled to February 26, 2020.
It is highly likely that the SEC will approve a Bitcoin US bond ETF
In the past, the SEC consistently rejected submissions regarding ETF-cryptocurrency. More than ten such proposals have been dismissed in the past two years. It seems that the SEC is concerned that once accepting such proposals, the traditional financial market will also be affected.
Moreover, high-probability Bitcoin ETFs are also subject to market manipulation due to the decentralized nature of cryptocurrencies. The committee needs to ensure they have sufficient oversight mechanisms before approving a Bitcoin US bond ETF. On the other hand, Wilshire Phoenix thinks that such concerns have been resolved.
Wilshire Phoenix is quite confident about the proposed Bitcoin US Bond ETF
William Herrmann of Wilshire Phoenix said:
“Our proposal is backed by multi-asset trust to ensure appropriate safeguards are in place to prevent Bitcoin’s permanent price volatility. In the event of a spike, the ETF will adjust your Bitcoin exposure by automatically increasing the allocation of US Treasury bills and vice versa.”
Wilshire Phoenix even sent a letter to the SEC to resolve these issues. It explains in detail how their ETF proposal is fundamentally different from the previous Bitcoin ETF proposals submitted. Price fluctuations are gathered from five different and reliable cryptocurrency exchanges, ensuring price transparency. However, it is not yet clear how the SEC is aware of these safeguards and approves Wilshire Phoenix’s U.S. Bitcoin bond ETF proposal.
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