WisdomTree Investments, a prominent asset manager in the United States, has submitted an application to the Securities and Exchange Commission (SEC) for the launch of its WisdomTree Bitcoin Trust. This move comes in response to the increasing interest and recognition of Bitcoin within the traditional finance space, following BlackRock’s recent application for a spot Bitcoin ETF.
WisdomTree’s Investment Objective and Valuation Method
In its filing, WisdomTree stated that its objective is to gain exposure to the price movements of Bitcoin while considering the operational costs and obligations of the ETF. To determine the value of the ETF’s shares on a daily basis, they plan to use the CF Bitcoin US Settlement Price, which consolidates trading data from major Bitcoin spot exchanges.
The asset manager approach involves conducting “in-kind” transactions with Authorized Participants. This allows them to deliver or facilitate the delivery of Bitcoin to the Trust’s custodian, U.S. Bank, National Association. It is worth noting that despite the name “trust,” both WisdomTree’s filing and BlackRock’s filings function as spot ETFs, as opposed to trust-based structures.
SEC’s Stance on Bitcoin ETFs
While the SEC has previously rejected applications for spot Bitcoin ETFs, it has approved Bitcoin futures ETFs. The filings by BlackRock and WisdomTree reflect the industry’s push to offer regulated investment options for participating in the Bitcoin market, even if it means sacrificing some features exclusive to sovereign Bitcoin usage.
The consecutive filings by BlackRock and WisdomTree demonstrate the increasing recognition of Bitcoin’s potential in traditional finance. By applying for spot ETFs, these asset management giants acknowledge the demand for regulated investment vehicles in the Bitcoin space. If approved, these filings may pave the way for broader adoption and a new wave of institutional investors entering the Bitcoin market. The race to launch Bitcoin ETFs indicates the growing interest and acceptance of cryptocurrencies within the traditional financial system.