A month ago, Bitwise Asset Management applied for a listing of bitcoin-ETF contracts on the NYSE Arca exchange. However, due to the shutdown it is only now accepted for consideration. Now the regulator has a month and a half to make a primary decision. This is not the first appeal to the Securities Commission, but this time the cryptocurrency contracts have every chance of being approved.
Financial contracts for cryptotrading have already become a legend for American investors. SEC has taken a very tough stance on this issue. The first application for bitcoin-ETF was filed in early 2018 by Cameron and Taylor Winkloss, but the regulator declined their offer.
Bitcoin ETF (Exchange Traded Fund) is a fund of indices which securities are traded on the stock exchange. The value of the asset is tied to the price of Bitcoin, and trading takes place according to the rules of buying and selling stocks. It has high liquidity.
Then the regulator said that this financial asset does not protect the interests of investors, and its price may be subject to manipulation. In general, SEC negatively relates to the cryptomarket. Although one of the commissioners of the Commission, Esther Pearce, is an ardent supporter of digital financial instruments, the other commissioners show great skepticism.
As a result, a bill was passed to the United States Senate on change of the regulatory rules in order to take the right to control the circulation of financial cryptocurrency contracts from SEC. However, the decision has not yet been made. It is unlikely that the senators would agree with him, but this puts a certain pressure on the Securities Commission.
Bitwise Asset Management believes that 2019 will be a breakthrough in cryptotrading. It is stated that the company has taken into account all the comments of the authorities, and proposes to use new technologies to secure the bitcoin-ETF contract.
Custodial cryptoservice is a set of services for the storage of financial assets. Includes both the contents of the register of owners, and the preservation of digital wallets.
In particular, summary values from the spot and futures markets will be used to determine the current value of the asset. In this case, information will be obtained from a large number of trading platforms. The decision to store the asset is rationalized here. To do this, they will start using a third-party custodial application that already has all the necessary permissions and licenses.
To trade bitcoin-ETF contracts it is proposed to use the opportunities of the New York Stock Exchange NYSE Arca, one of the largest in the USA.
Previously, a request for financial contracts linked to the price of cryptocurrency has already been filed by VanEck and SolidX, but there was a legal conflict. The deadline for consideration ended on February 27. However, due to the shutdown in the SEC physically could not make decisions. In this case, the application would be considered accepted.
In VanEck, it was decided not to exert pressure on the regulator, and withdraw the application for bitcoin-ETF. It entered the SEC on January 30, 2019. Now the authorities have 8 months to make a final decision. In order to make it positive, VanEck created its own trading platform and custodial service.