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US Securities and Exchange Commission rejects VanEck's application for a spot Bitcoin (BTC) ETF

Sat 13 Nov 2021 ▪ 21h03 ▪ 3 min read — by James Taylor

The US Securities and Exchange Commission has announced that it rejected VanEck’s proposal to launch a Bitcoin exchange-traded fund. In the light of this news, ProShares Bitcoin Strategy ETF (BITO) and Valkyrie Bitcoin Strategy ETF (BTF) fell by more than 1% during the US session.

VanEck applied for the listing of a spot-market Bitcoin ETF on 2nd March. And until today, the US SEC found various reasons for delaying their decision on this issue. In June, the regulator “sought and encouraged interested persons to provide comments” on the proposal.  Finally, the US Securities and Exchange Commission (SEC) rejected VanEck’s proposal.

The rejection comes weeks after the SEC approved the first Bitcoin futures-based Bitcoin ETFs: the ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF. The SEC has stated that it prefers to approve ETFs that track Bitcoin futures rather than BTC’s spot price.

This decision is far from being a bolt out of the blue though, as the SEC has repeatedly made it clear that it’s not going to approve spot Bitcoin ETFs. The watchdog has always claimed to be concerned about possible scams in the Bitcoin market.

While in the US regulators continue to reject Bitcoin ETF proposals, Canada is taking the lead. Several Bitcoin and Ethereum ETFs have already been approved and are currently operating in the country. American institutional investors like Ark Invest are gaining exposure to spot Bitcoin ETFs in Canada.

BITO and BTF fall after SEC’s rejection

ProShares Bitcoin Strategy ETF (BITO) and Valkyrie Bitcoin Strategy ETF (BTF) have been in the red since the SEC rejected VanEck’s Bitcoin ETF application. BITO and BTF are currently the only Bitcoin-based ETFs in the US.

As of this writing, BTF is down 1.34% and is trading at around $25.34 per share, while BITO is at $41.12, which is a 1.23% dip. ETFs might fall even lower next week as the market adjusts to the news of the SEC’s rejection.

Considering Gary Gensler’s persistent sarcasm with regard to spot Bitcoin ETFs, the Commission’s decision didn’t come as a surprise to most market participants.

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James Taylor avatar
James Taylor

Trends are temporary. The blockchain isn’t a trend; it’s the future. I want to help as many people as possible understand it in a simple, clear and interesting way.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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