Franklin Templeton, a major asset manager with $1.5 trillion in assets under management, has taken a significant step towards introducing a Bitcoin Exchange-traded Fund (ETF). They've filed a crucial regulatory document with the U.S. Securities and Exchange Commission (SEC), signaling their commitment to making cryptocurrencies more accessible to investors. Meanwhile, the SEC has extended its evaluation period for ARK 21Shares' Bitcoin ETF application, marking another delay in the quest for cryptocurrency ETF approval.
In related news, Bitwise, a leading cryptocurrency asset manager, remains undeterred in its pursuit of a spot Bitcoin ETF. With a meticulous and comprehensive revised application, Bitwise is addressing concerns raised by the SEC, signaling the cryptocurrency industry's determination to overcome regulatory hurdles and bring digital assets into the mainstream.
Franklin Templeton Initiates Regulatory Process for Bitcoin Spot ETF Approval
Franklin Templeton, a prominent asset manager overseeing up to $1.5 trillion in assets under management (AUM), has taken a significant step toward realizing its ambition of launching a Bitcoin Exchange-traded Fund (ETF) with the filing of a crucial regulatory document.
The company officially submitted a Form 19b-4 to the U.S. Securities and Exchange Commission (SEC), signifying its intent to introduce a Bitcoin Spot ETF. Form 19b-4 serves as a formal notification to the SEC regarding proposed rule changes by a self-regulatory organization (SRO). In this case, Franklin Templeton, as an SRO, is exercising its regulatory authority to introduce changes related to trading rules and ETF offerings.
This regulatory filing marks the commencement of the SEC's evaluation process, during which the commission will assess whether the proposed changes align with the regulatory framework and safeguards that govern the ETF industry. Franklin Templeton's application must convincingly demonstrate that these changes support fair trading practices, offer robust investor protections, and establish necessary oversight procedures.
The news of Franklin Templeton's ETF application has spurred optimism within the cryptocurrency community, particularly among Bitcoin Cash (BCH) enthusiasts. The filing coincided with a remarkable surge in the price of BCH, the result of which saw the Bitcoin fork peak by 15% and triggered the liquidation of millions of short positions.
Notably, Franklin Templeton has designated Coinbase Trust Company as the custodian responsible for safeguarding the Bitcoin assets held within the proposed ETF. Coinbase Trust Company, a subsidiary of Coinbase Global, Inc., is a highly reputable institution within the cryptocurrency ecosystem, known for its commitment to security and compliance.
In addition to the custody of Bitcoin holdings, the Bank of New York Mellon has been appointed as the custodian for the fund's cash holdings. The involvement of these respected financial institutions as custodians underscores Franklin Templeton's dedication to upholding the highest standards of security and governance in its Bitcoin Spot ETF offering.
The filing of the Form 19b-4 represents a significant milestone for Franklin Templeton in its pursuit of offering an ETF tied to the cryptocurrency market. The move not only demonstrates growing institutional interest in digital assets but also signifies a step toward greater accessibility and legitimacy for Bitcoin as an investment vehicle.
As the SEC begins its review process, the cryptocurrency and investment communities will be closely watching for updates and developments, eager to witness the potential expansion of cryptocurrency offerings within the traditional financial landscape.
SEC Delays Decision on ARK 21Shares' Bitcoin ETF
The SEC has once again delayed its decision on the approval of a spot Bitcoin ETF proposed by ARK 21Shares, opting to take the maximum allowable time to evaluate the application.
In a notice issued yesterday, the SEC announced that it would extend the review period for ARK 21Shares' spot BTC ETF on the Cboe BZX Exchange. The regulatory body had previously deferred its decision on 11 August 2023, which had set a deadline for 11 November of this year for a final ruling on whether to approve, disapprove, or further delay the ETF.
"The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein," the SEC stated in its announcement.
Interestingly, the SEC's decision to extend the review period coincided with its deferment of a decision on a Bitcoin ETF application from fund manager GlobalX. This development raised questions about the commission's decision-making process, as the SEC typically waited until just a few days before deadlines to file delays for ETF applications.
With this latest extension, the SEC's final deadline for determining the fate of ARK 21Shares' ETF will be 10 January 2024, marking 240 days since the initial application was submitted. Meanwhile, the next deadline for GlobalX's ETF will be 21 November 2023.
This delay follows a letter from a group of four U.S. Representatives who urged SEC Chair Gary Gensler to "immediately" approve a spot Bitcoin ETF. They argued that the SEC's approval standards for ETFs linked to cryptocurrency futures were inconsistent and discriminatory compared to spot investment vehicles.
As of now, the SEC has not approved any spot Bitcoin ETF for listing on a U.S.-based exchange. The cryptocurrency industry had anticipated that the SEC might reconsider pending ETF applications after the commission's legal setback against Grayscale in August.
The next deadlines for spot cryptocurrency ETF applications from seven major firms, including BlackRock, WisdomTree, Invesco Galaxy, Valkyrie, Bitwise, VanEck, and Fidelity, are scheduled for next month. However, the SEC retains the authority to further delay or extend these deadlines until March, adding to the uncertainty surrounding the regulatory timeline for cryptocurrency ETFs in the United States.
Bitwise Persists in Quest for Spot Bitcoin ETF with Amended Application
Meanwhile, Bitwise, a leading cryptocurrency asset manager, has shown unwavering determination in its pursuit of a spot Bitcoin ETF by submitting a meticulously revised application to the SEC. The amended application aims to address and rebut concerns raised by the SEC following its previous denial of Bitwise's proposal.
Analyst James Seyffart, known for his insightful commentary on cryptocurrency developments, revealed that Bitwise has taken a systematic approach to respond to the SEC's reservations. The updated application confronts eight key points of disagreement outlined by the regulatory body.
One of the primary areas of contention between Bitwise and the SEC revolves around the reliability of Bitwise's chosen price discovery metrics. The SEC had previously expressed reservations about potential inconsistencies stemming from the sporadic and asynchronous nature of the prices considered. Furthermore, the SEC interpreted Bitwise's acknowledgment of these limitations as an admission of potential bias in the asset manager's approach.
However, Bitwise has vehemently argued that the limitations imposed by the scarcity of data actually serve to reinforce their original thesis. The company contends that the CME Bitcoin futures market plays a more substantial role in determining Bitcoin prices than previously recognized.
By doing so, Bitwise asserts that their reliance on this data source is justified and that it enhances their ability to provide an accurate representation of Bitcoin's market value.
Bitwise's persistence in addressing these concerns reflects the broader sentiment within the cryptocurrency industry, which has been eagerly awaiting the approval of a spot Bitcoin ETF. Such an ETF would open doors for mainstream investors to access the digital asset market more easily.
The journey toward regulatory approval for a spot Bitcoin ETF has been a complex and arduous one, marked by scrutiny over issues such as market manipulation, custody, and price discovery. Bitwise's commitment to refining its application underscores the industry's determination to navigate these challenges and pave the way for broader cryptocurrency adoption within traditional financial markets.
The price of Bitcoin (BTC) had dropped 0.4% over the past 24 hours, according to data from CoinStats. Consequently, the leading cryptocurrency was trading hands at $26,242 at press time. Notably, this 24-hour loss had also pushed the cryptocurrency’s weekly performance further into the red zone to -3.13%.
Price chart for BTC (Source: CoinStats)
Despite the negative short-term performances, BTC was still in positive territory on the longer timeframes. As per CoinStats data, the market leader was 1% up over the past 30 days. Furthermore, BTC still maintained a 37% uptick for the past year as well.