The United States Securities and Exchange Commission (SEC) rejected a bitcoin exchange-traded fund run by VanEck as per an announcement on Friday. The ETF aimed to track the spot movement of Bitcoin’s price, FX Empire reported.
CBOE BZX Exchange filed the VanEck Bitcoin ETF proposal back in March. CBOE wanted to become the first fund in the United States to track the biggest crypto’s spot price.
VanEck’s Bitcoin futures ETF has been considered effective by the SEC since October 23. While it has not started trading yet, it has been considered by some analysts as the first to follow ProShares.
Development wasn’t a surprise
The rejection of VanEck’s spot price ETF doesn’t come as a surprise. On a large number of occasions, the SEC has made it clear that it will not allow spot price Bitcoin ETF at the moment. The watchdog has always made it clear that it is concerned about possible market manipulation, which would affect investors in Bitcoin adversely.
While quite a few investors believe an ETF tracking BTC directly is far more favorable to futures-based products, they seem to be a steppingstone to a more preferable ETF down the line.
After SEC chair Gary Gensler stated he’d be more open to a futures-based product, the SEC saw a flurry of applications for futures-based ETFs. A number of bitcoin futures ETFs are waiting for the green light from the regulator to start trading.
Canada leading the way for ETFs
The Canadian government has already approved several Bitcoin and Ethereum ETFs as their Southern neighbor keeps rejecting Bitcoin ETF proposals. Ark Invest and other American institutional investors are accessing spot Bitcoin exchange traded funds in Canada.
The SEC approved the first futures-based Bitcoin ETFs about a month ago. The first two to enjoy endorsement are the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF, trading under the tickers BITO and BTF. The SEC has pointed out it would rather approve ETFs that track Bitcoin futures instead of the crypto’s spot price.
BITO and BTF drop after rejection, further decline to follow
As the market adjusts to the SEC rejection news, ETFs might see a serious decline. Both ProShares and Valkyrie have been in the red zone since the SEC’s rejection of VanEck. Analysts are watching the market and Bankless Times will be tracking their predictions to keep readers current on all relevant developments.
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