The U.S. Securities and Exchange Commission (SEC) axed the hopes of Bitcoin Bulls by rejecting nine more Bitcoin ETF applications. SEC continued to hold its stance of hostility toward the much-anticipated cryptocurrency investment products
On Wednesday, the US regulator rejected two ETF proposals, filed by NYSE Arca, sought to list bitcoin ETFs from fund providers ProShares and Direxion. Earlier five inversed and leveraged ETFs from Direxion and another one from GraniteShares were rejected as well. SEC cites that the applicants did not meet their requirement of rules that would prevent potential fraud and manipulation of Bitcoin markets.
“Surveillance-sharing with a regulated market of significant size related to bitcoin is necessary to satisfy the statutory requirement that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”
It further mentions that the technological and investment potential of Bitcoin and blockchain technology hasn’t been evaluated before taking this decision. The rejection is solely on the basis of applicants’ failure to abide by individual sections of the Exchange Act. The agency also quoted a letter it received from CBOE, the US exchange offering Bitcoin futures trading:
“Additionally, the President and COO of CFE, recently acknowledged in a letter to the Commission staff that ‘the current bitcoin futures trading volumes on Cboe Futures Exchange and CME may not currently be sufficient to support ETPs seeking 100 [percent] long or short exposure to bitcoin’.”
Most financial analysts have had predicted this outcome and thus the decision did not garner many surprises. Notably, the reasons noted by SEC are similar to those which were given when the Bitcoin ETF by Winklevoss Twins’ was disapproved twice in a row.
The US regulatory has recently postponed its decision regarding the ETF by VanEck SolidX Bitcoin Trust until September 30, which was sort of a forewarning for the applicants whose verdicts were scheduled before the said date. While multiple rejections haven’t dampened the hopes of some enthusiasts as they believe that SEC will approve a Bitcoin ETF soon, including the president of CBOE.
The co-founder and the CEO of Crescent Crypto, Ali Hassan predicts that approvals will happen in the next 18 months. He told CNBC, earlier this month:
“We do think that a product is coming soon. Perhaps, in the next 18 months, we’ll see a Bitcoin-only ETF.”
Bitcoin prices often take a hit with each rejection concurrently the value is pumped up over the speculations of a positive outcome. Ahead of SEC’s announcement the BTC/USD had risen by over 7 percent.
The other half of the crypto enthusiasts however do not believe that a Bitcoin ETFs will be a good news, Andreas Antonopolous, the renowned Bitcoin evangelist openly argues against them.