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Bitwise To SEC: 3 Reasons The World Is Ready For A Bitcoin ETF

Jay Clayton, chairman of the Securities and Exchange Commission. CQ-Roll Call, Inc via Getty Images

The U.S. Securities and Exchange Commission has published a detailed presentation shared by Bitwise, the venture-backed cryptocurrency index and fund provider, explaining why the startup believes the world is ready for the first bitcoin fund traded on a major exchange.

Buried in the document, presented one week ago by San Francisco-based Bitwise to SEC commissioners Robert Jackson, Hester Peirce, and Elad Roisman, is a three-pronged argument for why Bitwise believes the cryptocurrency market is mature enough to support such an exchange traded fund: spot market efficiency, institutional-grade custody of crypto assets, and a growing futures market.

As institutional investors increasingly look for legitimate ways to gain exposure to bitcoin, while not having to dabble directly in the cryptocurrency spot market, these developments could indeed result a huge boon to the cryptocurrency industry.

However, the publication of the documents by the SEC should not be taken as an endorsement by the regulator, which regularly shares similar information it receives with the public. Just today, in fact, SEC commissioner Jay Clayton expressed doubts over the likelihood bitcoin would have an ETF on a major exchange anytime soon.

“The reality is that the bitcoin market of today bears little resemblance to the crypto market of a few years ago,” says Bitwise global head of research Matt Hougan. “The crypto market today is one dominated by firms like Jane Street and Fidelity; it's one where regulated, institutional custodians provide world-class service and are insured by Lloyd's of London.”

The 31-page slideshow was posted by the SEC as part of a number of responses submitted to a request for comment by the regulator posted in February, seeking information about the proposed bitcoin ETF, officially called the Bitwise Bitcoin ETF Trust, which would tra...

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