The Securities and Alternate Fee has prolonged its overview interval for NYSE Arca’s proposal to listing shares of the Bitwise 10 Crypto Index Fund (BITW) as an exchange-traded product, in keeping with a Tuesday submitting.
The choice units up a key deadline of March 3 for the regulator to both approve or reject the conversion of the $1.4 billion fund, making a important take a look at for whether or not multi-crypto funding automobiles can efficiently transition into exchange-traded securities.
The proposal, initially filed Nov. 14, seeks to transform itemizing BITW from its present over-the-counter buying and selling standing to a totally regulated ETP construction, in keeping with the unique submitting.
Learn Extra: Bitwise Seeks to Convert $1.3B Crypto Index to ETP
The SEC stated it wanted extra “time to contemplate the proposed rule change and the problems raised therein,” however didn’t point out within the submitting why extra time could be wanted.
NYSE Arca proposed itemizing BITW below a brand new rule 8.800-E class particularly designed for “Commodity and/or Digital Asset-Primarily based Funding Pursuits,” the submitting famous.
The fund at present holds 10 cryptocurrencies, with bitcoin comprising 72.7% of the portfolio, adopted by Ethereum at 14.7% and XRP at 5.8%, in keeping with the fund web page.
If authorized, the conversion would shift BITW from its present OTCQX Finest Market citation to exchange-traded standing, probably serving to handle the fund’s premium/low cost points via creation/redemption mechanisms, in keeping with Bitwise’s preliminary announcement.
Over-the-counter buying and selling usually presents challenges for buyers, who usually encounter lowered liquidity and a better probability of fraud or inventory manipulation in comparison with exchange-listed merchandise.
The fund at present trades at $60.95 whereas having a internet asset worth of $71.72, highlighting the pricing gaps that an ETP construction goals to reduce, in keeping with the fund web page.
The SEC has obtained no public feedback on the proposal through the preliminary overview interval, in keeping with the submitting.
The fee’s prolonged overview of BITW’s conversion proposal aligns with its customary 45-day extension interval, generally used when reviewing novel monetary merchandise. The March deadline provides regulators extra time to evaluate how a multi-crypto index product would operate inside an exchange-traded construction.
Bitwise declined to touch upon the pending regulatory submitting.
