Bitwise files for Bitcoin ETF backed by futures contracts

TL;DR Breakdown

• Bitwise has submitted another Bitcoin ETF proposal to the United States SEC.
• The funds seek to invest in Bitcoin futures contracts instead of the actual cryptocurrency. 

Crypto index fund manager Bitwise has become the latest company seeking a Bitcoin (BTC) backed exchange-traded fund (ETF) in the United States. Unlike other Bitcoin ETF applications that seek to invest in the actual cryptocurrency, the “Bitwise Bitcoin Strategy ETF” will be backed through futures contracts, according to the document. 

Another Bitcoin ETF application is the US

Bitwise reportedly filed for the Bitcoin exchange-traded fund on Tuesday with the United States Securities and Exchange Commission (SEC). The funds seek to provide a long-term capital appreciation for investors by harnessing “futures contracts that provide exposure to movements in the value of bitcoin.”

Bitwise emphasized in the document that the Bitcoin ETF won’t directly invest in the cryptocurrency, as with other recent pending applications. However, it will “obtain exposure to Bitcoin primarily through indirect investments in standardized, cash-settled Bitcoin futures contracts traded on commodity exchanges registered with the CFTC.”

In addition to the Bitcoin futures contracts, the Bitcoin ETF might also invest in Canadian-listed funds that provide exposure to Bitcoin and pooled investment vehicles. It may also hold cash, U.S. government securities, and money market funds.

Crypto ETFs can unlock “trillions of dollars”

Bitwise now adds to the list of companies seeking approval from the regulator to launch the country’s first ETF tied to the largest crypto. VanEck, Fidelity, and SkyBridge are among the companies that have applied with the SEC for approval.

A Bitcoin ETF unlocks the door for institutional investors to participate in the Bitcoin market without having to undergo the hassle of using a cryptocurrency exchange or needing to set up a wallet to secure their holdings. Recently, the chairman of O’Shares ETFs, Kevin O’Leary, said there are trillions of dollars waiting to pour into the crypto market if the US regulator will approve an ETF and also set up clear regulation for cryptocurrency.