WisdomTree Investments, a New York-based asset manager with over $60 billion worth of assets under management, has filed for a commodity exchange-traded fund (ETF) with an up to 5% exposure to Bitcoin.
According to a filing with the U.S. Securities and Exchange Commission (SEC), the fund is looking to mostly invest in four commodity sectors: energy, industrial metals, precious metals, and agriculture. It would primarily use futures contracts for its investments.
If approved the fund, called WisdomTree Enhanced Commodity Strategy Fund, would trade cash-settled bitcoin futures on the Chicago Mercantile Exchange (CME), one of the largest regulated bitcoin futures markets.
While BTC would be a small fraction of the fund’s portfolio, some believe it could still impact the market as it would allow investors to gain exposure to BTC without actually managing any private keys. As CryptoGlobe reported, an Australian investment app has recently launched a portfolio for its users with a similar bitcoin allocation.
WisdomTree’s ETF filing assets the fund “will not invest in bitcoin directly,” which could help appease the SEC’s concerns surrounding the cryptocurrency space. The regulator has repeatedly rejected bitcoin ETF proposals from Bitwise, Gemini, and other firms, citing possible market manipulation in the crypto space, custody issues, and a lack of central control.
The rejection saw SEC Commissioner Hester Peirce – a proponent of crypto-related products – conclude the agency was “unwilling to approve” the listing of products that would “provide access to the market for Bitcoin,” and accused it of having ever-shifting standards.
This time, however, the problem may not be the exposure to bitcoin. Speaking to Bloomberg Steven Dunn, head of ETFs at Aberdeen Standard Investments, pointed to the futures market as a concern, saying:
My experience has told me that in a world in which we have physically-based products versus futures-based products, what most investors want and expect is spot price, they want access to the physical.
Futures have reportedly come under increased scrutiny after a plunge in oil contracts saw the United States Oil Fund (USO) plunge in April, as oil ended up trading in negative territory.
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