The US Securities and Exchange Commission (SEC) has rescheduled its decision on whether to approve Bitcoin exchange-traded fund proposed by New York-based investment-management firm Wilshire Phoenix.
The proposed rule change will allow Wilshire Phoenix Fund to list shares of ETF on NYSE Arca. Earlier in June, the SEC has declared that the public can comment on the proposed ETF within 21 days’ time period. After getting the public comments, the SEC can make an initial ruling within 45 days, but the agency can extend it up to 90 days.
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Unlike other ETF proposals, Wilshire’s trust plans to hold positions in Bitcoin, short-term Treasury bills, and US dollars. Explaining that rationale behind this diversification, the company says it would reduce overall volatility and provide investors with exposure to bitcoin “in a manner that is more efficient, convenient and less volatile than purchasing stand-alone bitcoin,” the filing stated.
In that respect, it will be less similar to an ETF and more like the private placement investments which are sold to accredited investors to enable them to have exposure to cryptocurrencies in traditional financial accounts.
A long list of failed ETF attempts
With this latest decision, the Wilshire proposal joins the long list of failed attempts to get an ETF approved by the SEC, leaving the title for the first approved BTC exchange-traded product still empty.
Having received only six comment letters so far, the commission is seeking more comments on the proposal before it makes a further decision. The deadline to submit comments is due 35 days. Given the ramifications of a bitcoin ETF, however, the SEC may extend this time period an additional 60 days if it determines a longer period is appropriate.
Historically, the US top regulator takes the maximum amount of time available to them to evaluate the proposed BTC derivatives. There is then a period of six months for the listing exchange to address grounds for disapproval that may have been highlighted by the SEC.