Jake Chervinksy, GC for Compound Finance, tweeted this morning about his pessimistic sentiment towards the Wilshire Phoenix Bitcoin ETF approval. The SEC has denied various prior ETF applications, and has voiced underlying concerns about Bitcoin market manipulation, despite commissioner Hester Pierce’s dissention with the agency’s recent decisions.
A Bitcoin ETF is probably not happening in 2020
Hopes are not high for the SEC’s approval of Wilshire Phoenix’s ETF application. Especially since the US regulatory agency has previously denied every other ETF application put in front of them.
The SEC has until Wednesday, February 26th to make a decision on the applicant. Exactly one week from today.
The SEC’s final deadline to approve or deny the Wilshire Phoenix bitcoin ETF is next Wednesday, February 26.
Despite the crazy premium on GBTC, denial is all but certain.
This is the only bitcoin ETF proposal pending, as Bitwise & VanEck take a break. I’d guess no ETF in 2020. https://t.co/oiAukjioBo
— Jake Chervinsky (@jchervinsky) February 19, 2020
The agency has expressed a series of underlying concerns regarding the nascent Bitcoin and cryptocurrency markets, in a statement made public in January of 2018. None of these concerns have been met by any applicant to the agency’s satisfaction, so far. Chervinksy believes the Wilshire Phoenix application will almost certainly be denied.
The SEC’s main concerns are as follows:
- Valuation. The SEC wants to see ETFs track multiple exchanges to keep pricing fair. Arbitrage opportunities prevent the valuation from being gamed on any one exchange.
- Liquidity. Even though Bitcoin’s daily trading volumes are in the billions, the SEC still has concerns about liquidity in Bitcoin markets.