WisdomTree, an asset manager that specializes in exchange-traded funds (ETFs), has announced revisions to its spot Bitcoin ETF. The move comes after WisdomTree submitted a filing to the US Securities and Exchange Commission (SEC) to launch the ETF in March.
The ETF, which aims to provide investors with exposure to Bitcoin without actually holding the cryptocurrency, was initially structured as a unit investment trust. However, WisdomTree has now revised its proposal to make the ETF a grantor trust, which will allow it to hold physical Bitcoin.
Revisions to the ETF
The revised filing states that the ETF will hold Bitcoin as its primary asset, and the value of the ETF’s shares will be based on the market value of Bitcoin held by the trust. Additionally, the ETF will not invest in Bitcoin futures contracts or other derivatives.
The ETF will also use the CME CF Bitcoin Reference Rate as its benchmark, which is based on the price of Bitcoin across various cryptocurrency exchanges.
Implications of the Amendments
The move to a grantor trust structure means that the ETF will be able to hold physical Bitcoin directly, rather than holding Bitcoin indirectly through futures contracts. This will provide investors with more direct exposure to Bitcoin, as well as potentially reducing the ETF’s tracking error.
The revisions to the ETF proposal also suggest that WisdomTree is confident that the SEC will approve the ETF. The SEC has yet to approve any Bitcoin ETFs in the US, despite numerous filings from various asset managers.
Conclusion
WisdomTree’s revisions to its spot Bitcoin ETF proposal suggest that the asset manager is optimistic about the ETF’s prospects for approval. If approved, the ETF would provide investors with a new way to gain exposure to Bitcoin, without actually holding the cryptocurrency.
