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The Bitcoin ETF Dream Is Alive and Kicking

A Bitcoin ETF may not be far fetched after all.

The Bitcoin ETF Dream Is Alive and Kicking

Key Takeaways

  • Wilshire Phoenix wants to launch a Bitcoin commodity trust, structured similar to that of Grayscale.
  • WisdomTree proposed a commodity ETF that has a 5% allocation to BTC.
  • Institutional interest in Bitcoin continues to persist, and these funds could help capture more capital inflows to BTC.

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There are now two new attempts to get an exchange-traded Bitcoin product approved by the SEC. But unlike previous ETF attempts, the proposed funds are taking a regulator-friendly approach.

Institutions Take Aim at Bitcoin

Grayscale’s blockbuster 2020 has renewed institutional interest in Bitcoin. With Grayscale’s multi-crypto trust trading at an absurd premium, there is demand from the American investor base for exchange-traded Bitcoin products.

WisdomTree and Wilshire Phoenix are trying to get fresh exchange-traded products approved by the SEC. Wilshire Phoenix is known in the Bitcoin community for its previous attempts to get a Bitcoin ETF approved.

This time, the asset manager has put together a slightly more regulator-friendly plan.

Rather than an ETF, Wilshire Phoenix is trying to launch a Bitcoin commodity trust. This would pit Wilshire against Grayscale’s $4 billion BTC trust.

On the other hand, WisdomTree is gunning for an ETF, but yet again, with a regulator-friendly twist.

Instead of an out and out Bitcoin ETF, WisdomTree will only allocate 5% of the total fund to BTC. The rest will be spread across energy, metals, and agricultural commodities reported Coindesk. The fund will be categorized as a commodity strategy fund.

Bitcoin’s classification leans towards that of a commodity, with U.S regulators agreeing that it should come under the purview of the Commodities and Futures Trading Commission (CFTC). So in a way, BTC’s addition to this portfolio makes sense, especially for regulators.

From ETF proposals being outright shot down by the SEC to the world’s best-performing hedge fund trading Bitcoin futures, the digital asset has come a long way in just two years.

The institutional narrative grows stronger by the day, too. CME’s Bitcoin futures and options have seen roaring growth in 2020. Several old-timers, like Paul Tudor Jones and Robert Kiyosaki, have come to appreciate Bitcoin’s value proposition.

Source: Skew

And while Bitcoin has been highly correlated to equities since March 2020, struggling to live up to it’s perceived status as a safe-haven investment, investors still see it as a worthwhile investment given the state of the economy.

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