Everything you need to know about the remaining ETF proposals

24 Aug, 2018
by Will Heasman
Everything you need to know about the remaining ETF proposals

Every eye in the crypto-sphere is on the SEC and their decision surrounding a potential crypto ETF. With Bitcoin (BTC) ETF proposals from the Winklevoss', GraniteShares, Proshares, and Direxion either rejected or under review and with the VanEck proposal delayed, will we ever get a crypto ETF approved?

For some reason the promise of an ETF has grabbed the crypto space by the horns and is dragging it up, down, and sideways (mainly down, actually). The bad news for those who set their hopes on a BTC ETF is that the SEC has rejected a total of 10 ETF proposals, the good news is, not all is lost...

Aside from the recently rejected ETF proposals currently under review, there are two ETF proposals yet to be decided on, one of which (the CBOE Solidx-VanEck ETF) has already been put on hold, and may well be delayed again. The other (the Bitwise crypto ETF) is yet to have its first update and again, will probably be delayed (which contrary to popular belief may be a good thing - more on that later) ...

With that in mind, let's have a look at the remaining ETF proposals for this period, what they do, and their chance of approval.


  • The Bitwise Crypto ETF proposal:

|Update: 7th September 2018 | Final deadline: Unknown|

This is slightly different to every other ETF proposal we’ve had, while the rest of them focus around BTC, this one focus’ on Bitwise Asset Management’s HOLD 10 index, a “market-cap-weighted index of the ten largest cryptocurrencies”, which allegedly captures 80% of the entire cryptocurrency market capitalization. Filed in July, the Bitwise ETF will represent a basket of assets (including BTC, ETH, XRP etc.) tracking investors returns on the index.

According to Bitwise the advantage of tracking a basket of assets rather than just one allows for continuously changing supply, liquidity, trade volume concentration, and custody limitations. This advantage could sway the decision towards approval, as one of the main concerns of the SEC is manipulation, which indeed, is lowered with a collection of assets rather than a singular one.

  • The CBOE SolidX/VanEck ETF (the one everyone is banking on … literally)

|Update: 30th September 2018 | Final Deadline: 27th February 2019|

Unlike the plethora of other BTC ETFs, The CBOE proposal is a physically backed Bitcoin ETF, meaning that when investors buy shares in the ETF, the exchange buys Bitcoin. 

Everyone is excited about this one due to the heightened chance of approval. It addresses many of the concerns the SEC had with previously proposed BTC ETFs. However, the key issue of manipulation still hasn’t been fully solved.

Refusal of this particular BTC ETF won't be from lack of trying, VanEck went as far as to directly address concerns the SEC had raised following the Winklevoss ETF refusal, (such as valuation, liquidity, custody, and arbitrage) assuring that the proposed ETF will stay in line with the SEC’s vision.

Inevitably, it’s likely that the SEC will choose to delay the decision of both ETFs until their final deadlines; However, a delay isn’t necessarily a bad thing. Hypothetically If the SEC were forced to come to a decision tomorrow (in the midst of their ETF rejection frenzy), it would almost guarantee a resulting refusal; but would that be such a bad thing? …

Prior to the potential of an ETF was placed the table, the crypto space was shouting about institutional investment and all the rewards that could be reaped once those kinds of investors enter the space; baring this in mind its easy to understand why many are seeing this as a big chance for Bitcoin and the wider cryptocurrency sphere. However, there are some who disagree with the inordinate amount of hype around these crypto ETFs:

Realistically, until we can work out a way to prove manipulation of Bitcoin is fundamentally impossible (still very much up for debate), the SECs decision will most likely be refusal…  But don’t worry, that won’t be the end of crypto.

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