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- The US Securities and Exchanges Commission (SEC) has begun its preliminary investigation into WisdomTree’s application for a Bitcoin ETF.
- As ETFs provide a risk-free way to invest in crypto stocks, their popularity has increased among institutional investors.
- Eight other review applications have been filed with the SEC this year alone.
The SEC has decided to review the application of WisdomTree’s Bitcoin Trust, an ETF filed with the Cboe BZX exchange. This is a significant move by the SEC, opening new avenues for investing in the crypto realm.
ETFs – low-risk trading options
Even as cryptocurrencies breach mainstream financial sectors with every passing day, it is still a risky proposition for several populations. The actual risk stems from the fact that crypto entities still operate in a kind of legal void in most parts of the globe and show extreme volatility in their stock market prices. This is where exchange-traded funds (ETFs) come into play as they are pegged to crypto stocks but are traded on the regular exchanges with fiat currencies, thus offering low risk and low exposure to potential investors. This is why several ETF giants, including WisdomTree, push for an early ETF listing in regular stock markets after the SEC greenlights the proposal.
Other applications being examined
WisdomTree’s application is surprisingly the second to be taken up for review by the SEC. Van Eck’s application was earlier under consideration for a brief duration. Five comments have been posted about the application by the end of the commenting period. It would, however, be another month until the SEC gives its final verdict on the issue of Van Eck’s application. Kryptoin Investment Advisors is another noteworthy firm that has also filed a form for registering an ETF with the SEC. This, along with other applications, brings the total active filings reviewed by the SEC to eight.
However, the past year hasn’t been that optimistic for ETFs as all 24 applications that had been filed were entirely rejected by the SEC. Notwithstanding past statistics, the companies filing for review this year are hopeful of a favourable verdict as Bitcoins’ popularity has skyrocketed. The public has shown to warm up to the notion of ETFs.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
