The SEC has denied VanEck’s spot market BTC ETF application to track Bitcoin price.
In the ruling, the SEC reiterated concerns that the BTC spot market is vulnerable to fraud and manipulation, and so far only allowed BTC ETFs linked to futures to bet on futures prices from BTC and regulated by the CFTC.
The New York-based asset manager filed for an ETF in 2020 and has faced frequent delays from regulators. In rejecting today’s filing, the SEC found that VanEck had not actually addressed the concerns previously expressed by the Commission regarding the market:
“Listed exchanges have also sought to show that means other than custody arrangements are sufficient to prevent fraudulent and manipulative practices and practices, including the Bitcoin market as a whole, from fraud and tampering. No listed exchange can live up to its burden of making such a rally. “
An ETF is an investment vehicle that enables investors to buy stocks that represent an underlying asset. Real estate, gold and foreign currency ETFs are very popular in the US, so a Bitcoin ETF will allow investors to get more exposure to BTC without having to buy and hold crypto on exchanges. Storing in crypto wallets is Still complicated investors for most retail businesses. Over the years, the SEC has turned down numerous applications for a spot Bitcoin ETF because one of them is the underlying cryptocurrency, but before that, it approved a number of Bitcoin futures ETFs after a short while the chairman hinted at as early as the summer that the Commission will be inclined to approve these products.
ETF futures are already hugely popular, as we saw with ProShare’s Bitcoin Strategy ETF, which traded around $ 1 billion in stocks when it was launched a month ago when it debuted on the New York Stock Exchange. VanEck has a Bitcoin futures ETF on the market. Gabor Gurbacs, Director of Digital Asset Strategy at VanEck, said the market would be better off with a spot product. The fund structure is based on and argues that a spot product is cheaper for both issuers and investors.
Congressmen Tom Emmer and Darren Sotto sent a letter to the SEC chairman advocating a spot market ETF while Grayscale CEO Michael Sunshine repeated similar views, suggesting that approval of an ETF has indeed become a political issue. Despite the success of Bitcoin futures ETF products, VanEck’s rejection could mean the US won’t get a real ETF anytime soon.