New York-based Asset Management Firm Files for Bitcoin ETF
Wilshire Phoenix, a New York-based Asset management firm, has filed for an ETF which will store bitcoin, treasury bills and the US Dollar, January 15, 2019.
Coveting the ETF
The journey to finally getting a Cryptocurrency ETF has been a long and elusive one. Many firms have pursued and applied to the SEC for ETF approval, with many being rejected. Despite this, yet another firm has thrown its hat into the ring as Wilshire Phoenix, an asset management firm based in New York, has announced that they are pursuing a United States Bitcoin and Treasury Investment Trust.
Previously, the SEC has rejected many applications on the grounds of skepticism about market size, with one statement saying, “Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.’
Details of the application
According to the published statement, the ETF will be used to store bitcoin, short-term U.S. Treasury bills, and U.S. dollars.
The reason for this is that Wilshire Phoenix is trying to leverage the mainstream acceptability of treasury bills and fiat currency. By having all these together in the ETF, they feel that it will be easier to pitch to investors than an ETF that is solely focused on bitcoin.
“While the Shares are not intended to, nor is their purpose to, replicate a direct investment in bitcoin, they seek to provide investors with exposure to bitcoin with substantially lower volatility than a direct investment in bitcoin,” the filing statement said.
Bill Herrmann, a managing partner of Wilshire Phoenix, has stated that while his firm’s approach to the subject has been unorthodox, they have the same end goal as other firms that have applied for an ETF.
Is It Necessary?
Wilshire Phoenix’s plan to get the ETF approved by linking them with treasury bills and US dollars is a creative one, but it begs the question about whether it is necessary.
On one hand, tying crypto to fiat currency in order to help it gain acceptability isn’t a new practice, and in fact, it is the entire idea behind stablecoins. However, stablecoins have been rather controversial and are a great source of debate in the industry.
On the other hand, a move like this could send the message that bitcoin in itself isn’t enough to succeed in the market without aid from more ‘mainstream’ assets.
Regardless, it is only a matter of time before we know whether this bold move will be successful or rejected like all the others.
