Bitwise has filed an amendment to its Bitcoin spot ETF application in an effort to challenge regulators’ reasons for denying American investors access to the product. The firm argues that the CME Bitcoin futures market plays a significant role in Bitcoin’s price discovery, making it a suitable market for surveillance purposes. Bitwise claims that previous studies support this finding and that the SEC’s argument against the relevance of the futures market is flawed. According to Bitwise’s research, trading volume within the spot market may be inflated, meaning the futures market’s size is actually much larger.
Currently, numerous firms, including Bitwise, have been unable to launch a Bitcoin spot ETF in the United States due to the SEC’s denial. The SEC argues that the CME Bitcoin futures market is not closely related enough to the spot market to prevent potential manipulation. However, Bitwise disputes this claim, asserting that Bitcoin’s price is heavily influenced by the futures market. The firm’s research shows that CME futures accounted for a significant percentage of Bitcoin’s price discovery in 2021. Bitwise believes that this data demonstrates the relevance of the futures market and justifies a surveillance-sharing agreement.
In August, the SEC lost a lawsuit against Grayscale, prompting speculation that the agency may appeal the court ruling. Bitwise believes that strong arguments related to the relationship between CME futures and spot prices are necessary if the SEC does decide to appeal. The firm aims to provide new arguments and research in its amended filing to address the SEC’s concerns and strengthen the case for a Bitcoin spot ETF.