Selim Korkutata | Anadolu Agency | fake images
The Securities and Exchange Commission announced Friday that it rejected a bitcoin Publicly traded fund managed by VanEck that would have directly followed the price movements of the digital currency.
The application was filed in March by the Cboe BZX Exchange, which wanted the SEC to make a rule change that would allow it to list the VanEck bitcoin fund. The SEC said that Cboe had not done enough to show that it could prevent fraudulent trading to protect investors.
That rationale is in line with previous rejections by the SEC of proposed ETFs that would track bitcoin directly. Companies, including VanEck and Cboe, have been racing to launch the first US bitcoin ETF for nearly 10 years, but the SEC has been slow to adopt one, citing concerns about a lack of regulation and potential for fraud and manipulation in the bitcoin market.
There are several other similar bitcoin ETF applications awaiting decisions.
The rejection comes weeks after the SEC gave the green light to the first futures-based bitcoin ETFs: the ProShares Bitcoin Strategy ETF, which began trading on October 19 and saw a 4% increase on the first day, and the Valkyrie Bitcoin Strategy ETF, which began trading on October 22.
VanEck has a bitcoin futures ETF that the SEC considers effective as of October 23. Some viewed it as the first to follow ProShares, but it has not yet started trading.
Many investors think that these futures-based products are not as favorable as an ETF that tracks bitcoins directly would be, but some see it as an important step towards one in the future. Anyway that it could be a very long way.
There was a flood of applications for futures-based ETFs this year, shortly after SEC Chairman Gary Gensler made it clear that he would be more open to a futures-based product. Several more bitcoin futures ETFs are also awaiting the go-ahead from the SEC to begin trading.
