The SEC has deemed a series of applications for spot bitcoin ETFs as insufficient, according to sources cited by the Wall Street Journal. The filings were submitted by exchanges Nasdaq and Cboe Global Markets on behalf of asset management firms, including BlackRock and Fidelity Investments. The SEC claimed these applications lacked clarity and comprehensiveness.
This verdict comes amidst a surge in bitcoin prices and related stocks since mid-June, prompted by BlackRock’s filing with the SEC for a bitcoin ETF. Bitcoin value has risen approximately 20%, surpassing $30,000 for the first time since April.
In the wake of BlackRock’s move, several traditional and crypto asset managers have followed suit, including Valkyrie, Fidelity Investments, Ark Investment Management, Invesco, WisdomTree, and Bitwise Asset Management, which have all recently either re-submitted or altered their applications for spot bitcoin ETFs.
The creation of an ETF that reflects the price of bitcoin in real-time would represent a significant milestone for the industry, facilitating broader access to the cryptocurrency and allowing investors to trade bitcoin via a brokerage account, similar to stock shares. However, since 2017, the SEC has consistently rejected these types of funds due to concerns over vulnerability to fraud and market manipulation. Nevertheless, at least six ETFs that hold bitcoin futures have already entered the market.
The industry anticipated that the application from BlackRock, the world’s largest money manager known for its near-perfect application track record, could potentially sway the SEC towards approving a spot bitcoin ETF. However, the SEC claimed the filings failed to identify the spot bitcoin exchange required for a “surveillance-sharing agreement” or provide sufficient details regarding such surveillance arrangements.
A Cboe spokesperson confirmed plans to update and refile.
Information for this briefing was found via the WSJ and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.