Bitwise Joins Hunt for Bitcoin ETF Approval With Futures Product Filing

The asset manager is teaming up with ETF Series Solutions in its bid to get a U.S. bitcoin ETF over the finish line.

AccessTimeIconSep 14, 2021 at 9:48 p.m. UTC
Updated Mar 8, 2024 at 4:31 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

ETF Series Solutions has filed to launch a bitcoin futures exchange-traded fund (ETF) in partnership with Bitwise, a provider of crypto-based funds.

The application for the Bitwise Bitcoin Strategy ETF was filed with the U.S. Securities and Exchange Commission on Tuesday under the Investment Company Act of 1940. The fund seeks to invest in bitcoin futures and other financial products.

Proponents of bitcoin ETFs claim they would offer retail investors a regulated financial product that has exposure to bitcoin, giving those investors an alternative to investing in bitcoin directly. The SEC, the federal agency tasked with overseeing such products, has yet to approve one.

“The Fund will not invest directly in bitcoin,” the filing said. “While the Fund intends to obtain exposure to bitcoin primarily through indirect investments in standardized, cash-settled bitcoin futures contracts traded on commodity exchanges registered with the CFTC (’Bitcoin Futures’), it may also invest in pooled investment vehicles and Canadian-listed funds that provide exposure to bitcoin.” The CFTC is the Commodity Futures Trading Commission, another federal agency that regulates financial products.

The ETF might also invest in cash, U.S. government securities or money market funds, according to the filing. U.S. Bancorp Fund Services will act as the transfer agent and administrator, while U.S. Bank will serve as the custodian.

SEC Chairman Gary Gensler has indicated that the agency is more likely to approve a bitcoin futures ETF than a spot bitcoin ETF. A futures ETF will invest in a regulated bitcoin futures product offered by CME, rather than in bitcoin directly.

Gensler has raised concerns about crypto spot market regulation, echoing a view SEC staff has often hinted at in rejecting previous bitcoin ETF applications.

Bitwise CEO Hunter Horsley declined to comment on the fund, but said, “Bitwise has been managing crypto index funds since 2017. We continue to be focused on helping advisors and investors understand and navigate the space.”

UPDATE (Sept. 14, 2021, 22:06 UTC): Updated with a response from Bitwise.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.



Read more about