BREAKING: SEC Says Bitcoin ETF Filings Are Inadequate, Market Panic
- The SEC finds recent applications for spot Bitcoin ETFs insufficient due to clarity and thoroughness.
- Asset managers, including Fidelity and Ark Investment, are modifying their applications for spot Bitcoin ETFs.
- Approval of a Bitcoin ETF could revolutionize the industry by increasing accessibility and transforming the cryptocurrency market.
According to persons familiar with the subject, the Securities and Exchange Commission has ruled that a recent wave of applications submitted by asset managers to create spot Bitcoin ETF (exchange-traded fund) is insufficient, WSJ reported.
According to the persons, the agency notified exchanges Nasdaq and Cboe Global Markets, which submitted the applications on behalf of asset managers such as BlackRock and Fidelity Investments, that the files weren’t sufficiently clear and thorough.
Following in BlackRock’s footsteps were a slew of conventional and crypto asset managers. In recent days, Fidelity Investments, Cathie Wood’s Ark Investment Management, Invesco, WisdomTree, Bitwise Asset Management, and Valkyrie have all revived or modified their applications for a spot Bitcoin ETF.
Since 2017, the SEC has frequently rejected such funds on the grounds that they are prone to fraud and market manipulation. At least a half-dozen ETFs that hold Bitcoin futures are already available.
The Grayscale Bitcoin Trust (GBTC) trading volume increased as a result of the current interest from mainstream players in Bitcoin ETFs. Nonetheless, analysts believe that the SEC in the United States may be obliged to accept the Grayscale Bitcoin ETF proposal soon.
Since Grayscale filed an appeal against the United States Securities and Exchange Commission’s decision to deny its application in June 2022, the two sides have exchanged legal files in addition to oral evidence heard by three U.S. federal appellate court judges on March 7.
Prices for Bitcoin and other crypto-related equities have risen since BlackRock submitted paperwork with the SEC for an ETF that contains genuine Bitcoin in mid-June. The cryptocurrency has risen by approximately 20%, surpassing $30,000 for the first time since April. At the same time period, shares of Coinbase Global, which is listed as the custodian for the BlackRock fund’s assets, have risen by more than 30%.
Several industry observers believed that BlackRock’s submission would allay the SEC’s worries by committing to share “monitoring” of a spot Bitcoin trading platform with Nasdaq, which would list the ETF.
An ETF that reflects the real price of Bitcoin would be a game changer for the industry since it would allow more people to invest in the cryptocurrency. It would enable investors to purchase and sell Bitcoin via a brokerage account in the same way that they do stocks.
The day after the news, Bitcoin and the entire crypto market had a massive crash that erased today’s bull efforts.
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