WisdomTree, a well-known provider of exchange-traded funds (ETFs), has submitted an application to the Cboe BZX Exchange, seeking approval for the introduction of the WisdomTree Bitcoin Trust. This move follows BlackRock’s recent filing for a bitcoin ETF, highlighting the growing attention and acceptance of bitcoin in the realm of traditional finance.
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In their application, WisdomTree clearly stated their goal is to obtain exposure to the price of bitcoin, while carefully considering the expenses and responsibilities tied to the ETF’s activities. They plan to calculate the daily value of shares using the CF Bitcoin US Settlement Price, which consolidates trading data from significant bitcoin spot exchanges.
WisdomTree’s strategy entails engaging in “in-kind” transactions with Authorized Participants.
It is stated in their application that the Trust currently does not have plans to directly buy or sell bitcoin. However, the Sponsor (WisdomTree Digital Commodity Services, LLC) may instruct the Custodian (U.S. Bank, National Association) to sell bitcoin to cover certain expenses.
… Instead, when the Trust sells or redeems its Shares, it will do so through “in-kind” transactions. Authorized Participants, which are financial firms authorized to buy or redeem Shares with the Trust, will deliver or facilitate the delivery of bitcoin to the Trust’s account with the Custodian in exchange for Shares during the purchase, and the Trust, through the Custodian, will provide bitcoin to those Authorized Participants when they redeem Shares from the Trust.
The Transfer Agent will assist in processing purchase and sale orders in Baskets from the Trust.
Despite the name “trust,” both WisdomTree’s and BlackRock’s filings operate as spot ETFs.
Although the Securities and Exchange Commission (SEC) has previously denied applications for spot Bitcoin ETFs, it has granted approval for Bitcoin futures ETFs. The filings made by BlackRock and WisdomTree signify the industry’s efforts to offer regulated choices for investors to engage in the bitcoin market, although this comes with the trade-off of excluding certain features specific to sovereign bitcoin usage.
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The successive applications submitted by BlackRock and WisdomTree underscore the growing acknowledgment of bitcoin’s potential within traditional finance.
Through their pursuit of spot ETFs, these influential asset management firms are recognizing the need for regulated investment options in the industry. These filings have the potential to facilitate wider acceptance and attract a fresh wave of institutional investors to participate in the bitcoin market.
