The United States Securities and Exchange Commission has dashed the hopes of investors waiting to see a spot Bitcoin ETF on US soil following the rejection of VanEck’s application to launch the BTC product.
VanEck remains one of the most active companies in terms of filing with the SEC to launch a Bitcoin ETF. It has filed multiple applications and while some have been rejected by the agency, others were withdrawn by the company itself.
The prospect of an ETF in the United States improved in October this year when the SEC approved two futures-based Bitcoin ETFs. One of the products was VanEck’s Strategy ETF. Many assumed the Commission would be more lenient towards a spot exchange-traded fund tracking the performance of the primary cryptocurrency after the news in October. But this has not been the case.
The SEC rejected VanEck’s spot Bitcoin ETF application and restrained CBOE BZX Exchange from listing its shares in its latest filing. According to the document:
This order disapproves the proposed rule change. The Commission concludes that BZX has not met its burden under the Exchange Act.The SEC further stated that BZX and VanEck were unable to deal with lingering challenges, which were “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.”
Commenting on the issue, the commission’s chair, Gary Gensler, opined that a futures-backed ETF would be safer for investors, hence only such funds have been approved in the States.
As expected, VanEck’s Director of Digital Assets felt dismayed by the decision.
There is no good reason why not to approve a physical Bitcoin ETF while allowing Bitcoin futures ETFs at high-roll cost and Bitcoin closed end funds at double-digit premiums + no redemption capability. The physical Bitcoin ETF is arguably the most investor friendly option today.— Gabor Gurbacs (@gaborgurbacs) November 12, 2021