The Securities and Exchange Commission (SEC) has requested public input on the last remaining Bitcoin ETF application from Wilshere Phoenix and NYSE Arca. The proposal, which was filed in June, was delayed in August and has since been amended in a number of places as the pair try to maneuver their way around the worries that have seen the SEC deny every application so far.
Last Applicant Standing
The Wilshere Phoenix ETF application, which is being run in conjunction with the NYSE Arca exchange, is the last remaining of the recent flurry of ETF applications which has seen the likes of VanEck/SolidX/Cboe, Gemini, and Bitwise fall by the wayside. Given that it was filed in June a final decision wasn’t due before the end of the year, but the filing of amendments means that the process takes a step back to the public comment stage. One of the changes sees Coinbase Custody chosen as the custodian of the BTC held in the fund, with a second seeing Intercontinental Exchange (ICE) replacing Cboe as a futures partner alongside CME Group, given Cboe’s withdrawal from the Bitcoin futures market in March. Coinbase was stated as the original custodian of the fund’s BTC in the initial application, but the move to Coinbase Custody adds another layer of legitimacy, given the increased levels of protection it offers.
Wilshere Phoenix Tries to Solve Manipulation Woes
A final key amendment revolves around Wilshere Phoenix/Arca trying to satisfy the regulator’s concerns over Bitcoin price manipulation, which has been a constant thorn in the side of ETF applications to date. The filing now argues that by using the CME CF Bitcoin Reference Rate (CME CF BR) it can all but eliminate manipulation, given that the CME “exclusively utilizes its Constituent Platforms”, which it argues are free of manipulation. However, this doesn’t speak to the fact that Bitcoin as an entity is heavily manipulated by the likes of whales and miners, which will ultimately have an impact on the Bitcoin price on all markets. Given the fact that the application process has now taken a backwards step, no decision will need to be made until mid-2020, by which time the Bitcoin price could well be a talking point once more.
