Bitwise Asset Management has filed with the USSecurities and Exchange Commission (SEC) for a spot ethereum exchange-traded fund (ETF), a move aimed at providing investors with regulated exposure to ether without direct ownership of the cryptocurrency.
Bitwise Aims for SEC Approval With Spot Ethereum ETF, Backed by Correlation Data
Bitwise’s proposed ETF, conducted in partnership with NYSE Arca, by leveraging ethereum (ETH), seeks to mirror the asset’s price performance, minus the operational expenses associated with the fund’s management.
The submission comes on the heels of numerous prominent financial behemoths aiming to introduce a spot ether ETF.
The outlook for such an investment product, however, at least as perceived by the SEC, appears bleak.
Central to Bitwise‘s ETF application is a detailed correlation analysis, specifically designed to replicate the SEC’s methodology previously applied to bitcoin (BTC).
This analysis compares the ethereum spot market’s dynamics with those of the CME ethereum futures market, across various intervals—hourly, five-minute, and one-minute.
The findings reveal minimal variance in correlation values, suggesting a strong alignment between the spot and futures markets.
On X, Bitwise said that such a revelation is crucial, as it addresses potential regulatory concerns regarding market manipulation and the integrity of price discovery mechanisms in the ethereum (ETH) market.
Bitwise is publishing a new correlation analysis today as part of its new spot Ethereum ETF filing.
This is the first ETH correlation analysis to replicate the specific methodology used by the SEC in their evaluation of bitcoin, and the results are encouraging.
The correlation… pic.twitter.com/dOLh0F50BE
— Bitwise (@BitwiseInvest) March 28, 2024
The study’s outcomes could play a pivotal role in the SEC’s assessment process, offering empirical evidence that the ether market behaves in a manner consistent with regulated financial markets.
“We believe the results show [a] strong correlation between the [ethereum] spot market and CME [ethereum] futures market, at a level substantially similar to the findings of the SEC’s analysis in the spot bitcoin ETF approval order,” Bitwise said on Thursday.
“The analysis is included in the new 19b-4 filed by NYSE Arca today seeking approval to list Bitwise’s spot ethereum ETF.”
As the SEC deliberates on this application, the outcome may set a precedent for the future of other crypto assets, excluding bitcoin, aiming to be traded in this same fashion.
What do you think about Bitwise’s spot ether ETF filing and the correlation analysis? Share your thoughts and opinions about this subject in the comments section below.
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