There is still no Bitcoin ETF, and for all we know, there may never be.
Hopes had been revived in October, when the Bitwise application was initially rejected and then put into review.
Last January, Bitwise filed for an ETF.
Not long later, it said that it would base its calculations on just five percent of the crypto market, being that the majority of the market data is fabricated.
“In The Public Interest”
The logic wasn’t convincing enough for regulators, who rejected the application in October. In an unusual move, the SEC decided to review its own decision.
Now, though, Bitwise has cut to the chase, and said it doesn’t want to apply for an ETF license anymore. Its filing to that effect read, in part:
At this time, the Registrant has determined not to pursue the registration and sale of the securities covered by the Registration Statement. The Registrant believes that this withdrawal request is consistent with the public interest and protection of investors as required by Rule 477(a) of the Act and represents, in accordance with Rule 477(c) of the Act, that there has been no issuance, distribution or sale of the securities under the Registration Statement.
The move takes the wind out of the sails of some traders, who believe that an ETF is the harbinger of mass adoption, among other things. An ETF would certainly give traditional traders a new way to interact with cryptocurrency.
Unreliable Markets
Regulators have been concerned primarily over the reliability of market data in cryptocurrency. It’s remarkably hard to get good information about crypto markets. As such, the SEC and other regulators don’t feel that Bitcoin, or any other cryptocurrency, is a good fit for an ETF.
It doesn’t help when the applicant itself confirms that at least 95% of all the information the ETF would be based on is false. Basing an ETF on just 5% of the actual volume published isn’t seen as an actual solution.
These things being the case, it’s unclear when, if ever, someone will come through with an actually acceptable ETF. There are some players who it seems should have tried that have yet to do so, including the likes of Coinbase and Circle.
The most notable ETF efforts to date have been Bitwise and VanEck.
With no other pending ETF applications in the United States, it’s safe to say that’s a dream denied for now. There’s nothing stopping VanEck, Bitwise, and other players from trying again in the future, but it seems success will have more to do with changes in the wider Bitcoin markets than it will the applicants themselves.
