Bitwise Revises Bitcoin Exchange-Traded Fund (ETF) Filing

• The SEC questioned the rationale of using daily data rather than more frequent intervals.
• The current amendment centers on a detailed response to the eight disagreements.

One of the leading crypto asset manager, Bitwise Asset Management, has updated its proposal for a Bitcoin Exchange-Traded Fund (ETF) significantly. Bitwise’s pursuit of a Bitcoin ETF was recently updated with important information by Bloomberg Analyst James Seyffart in a tweet.

The intriguing new angle that Seyffart’s tweet brings to Bitwise’s overall pursuit of the niche product was made clear in the company’s most recent revision to its ETF application. The current amendment centers on a detailed response to the eight “Disagreements” listed by the US SEC in their denial of the company’s earlier ETF applications.

Significant Modifications

Bitwise’s reliance on “classic” price discovery measures such as IS (Information Share) and CS (Contributor Share) is the source of the first point of contention. Bitwise’s use of a research by Buccheri et al. as evidence of academics’ reservations about these criteria prompted SEC scrutiny.

Bitwise, however, argues that this only serves to bolster its case that the CME bitcoin futures market was the catalyst for price discovery. Because of the bias induced by sparsity in the data. The second point of contention is the frequency of Bitwise’s analysis. The SEC questioned the rationale of using daily data rather than more frequent intervals, such as intraday.

Moreover, Bitwise argues that adopting a daily basis is compatible with academic research. And gives a better understanding of possible time-dependent changes in trends. Since price discovery measures need statistical analysis over an acceptable period of time.

Bitwise resubmitted their spot Bitcoin ETF proposal in June, joining a slew of other giants, in doing so. The “Bitcoin and Ethereum Market Cap Strategy ETF” application Bitwise submitted to the SEC was unexpectedly withdrawn by the company on August 3.

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