Bitwise’s Hopes Dashed As SEC Rejects Bitcoin ETF Application

Bitwise’s Hopes Dashed As SEC Rejects Bitcoin ETF Application

According to an official publication by the United States Securities and Exchange Commission (SEC), the agency has made a final decision on the Bitcoin (BTC) exchange-traded fund (ETF) by Bitwise Asset Management and NYSE Arca. Unsurprisingly, the SEC has denied the application, stating that the team has failed to meet certain requirements.

In the letter of disapproval as written by Assistant Secretary Jil M. Peterson and running 112 pages long, the SEC claims that specific concerns, especially as they relate to the likelihood of market manipulation and other unscrupulous activities, were not properly satisfied by the team.

Bitwise has claimed before, that there are genuine exchanges with real trading volumes which are not manipulated in any way. However, the SEC was apparently not satisfied, as it claimed that even if this might be true, the team had not delineated how these genuine ones are different, in the same market with illicit ones.

The letter further states that the Bitwise/NYSE Arca team, have not properly described how it will ultimately conduct market monitoring, to ensure that there are no improper or illegal activities in the market, especially between some of the biggest exchange firms which could easily make up the “95%” of the market’s adulterated volume, as opposed to the “real” ones.

“The Commission also notes that NYSE Arca has not stated that it has entered or will enter into surveillance-sharing agreements with those “real” spot platforms that utilize surveillance tools. Moreover, even it NYSE Arca did enter into such agreements, it is not clear what ability NYSE Arca would have to compel the sharing of surveillance data.”

The long letter, even though it contains a few pointers to the disapproval based on several reasons, still ends with:


“IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the Exchange Act, that proposed rule change SR-NYSE Arca-2019-01, as modified by Amendment No. 1, is disapproved.”

The application was initially filed with the SEC on Jan. 28.

The disapproval would most likely be a big blow to Bitwise managing director and global head of research, Matt Hougan, who suggested a few days ago that since the market conditions today are a lot better than they were two years ago, we’re closer than we’ve ever been before to get a Bitcoin ETF approved.”

The price of Bitcoin has however not been affected by the rejection and hasn’t reacted in any way to the market’s last hope of a Bitcoin ETF in 2019.