NYSE Arca files rule change for Bitwise ETF proposal

Earlier this month, crypto asset manager Bitwise filed a Form S-1 with the Securities and Exchange Commission to act as a sponsor for a physically held bitcoin ETF listed on NYSE Arca. Amidst the S-1 filling, NYSE Arca filed a request to rule changes (a Rule 19b-4 filing) in order to better facilitate an ETF approval and listing should the SEC green light the registration statement. The proposed rule change under the 19b-4 moves to list the product under NYSE Arca Rule 8.201-E, known as 'commodity-based trust shares.'

A copy of this proposal, which further details the specifics behind index calculus, surfaced earlier today and can be found here.

According to the proposal, the calculated value of the index will pull prices from verified exchanges and weight based on greater volumes. The verified exchanges screened as index providers will be reduced from a universe of over 200 exchanges down to ~10. A list of those providers will be released on Bitwise's site at a future time. Furthermore, the proposal stated plans to have provisions in place for handling isolated hard-forks, and allowing the index provider "from time to time to adopt additional policies to address changes and new developments in the bitcoin universe."

"While there can be no assurance that the 19b-4 application will be granted or the SEC will review and ultimately accelerate the registration statement, we are optimistic that 2019 should be the year that a bitcoin ETF launches," said John Hyland, Global Head of Exchange-Traded Funds for Bitwise, in an earlier announcement.

About Author

Ryan Todd is a research analyst at The Block where he focuses on the convergence of fintech and digital assets. Previously he worked at Deutsche Bank as an equity analyst covering consumer finance and payments companies, and also spent time at ConsenSys exploring the broader Ethereum ecosystem. Ryan holds a BS in Economics and Accounting/Finance from Florida State University, and MS Finance from Vanderbilt University.