SEC Flags Inadequacy in Spot Bitcoin ETF Applications
The US Securities and Exchange Commission (SEC) has raised concerns over the latest batch of applications for spot Bitcoin exchange-traded funds (ETFs).
According to sources cited by The Wall Street Journal and other reports, the SEC flagged the applications submitted through Nasdaq and Cboe Global Markets by asset managers, including BlackRock and Fidelity Investments, as not being sufficiently clear and comprehensive.
Interestingly, the crypto market experienced a surge since mid-June when BlackRock filed for an ETF that would hold actual Bitcoin. Bitcoin prices soared by approximately 20%, breaking the $30,000 mark for the first time since April. Additionally, Coinbase Global, which is slated to be the custodian for BlackRock’s fund holdings, witnessed its shares skyrocket by over 30% during the same period.
This bullish activity led to a cascade of applications from both traditional and crypto asset managers, such as Fidelity Investments, Ark Investment Management, Invesco, WisdomTree, Bitwise Asset Management, and Valkyrie.
An ETF that directly tracks Bitcoin prices would be a groundbreaking development, as it would grant investors broader access to the cryptocurrency, enabling them to trade Bitcoin through brokerage accounts just like stock shares.
The SEC, however, has a history of rejecting such funds since 2017, citing susceptibility to fraud and market manipulation. There are already several ETFs in the market that own Bitcoin futures, but none that track the spot price.
BlackRock, being the largest money manager globally, was considered the most promising contender for securing approval for a spot Bitcoin ETF, given its exemplary track record with applications. Many speculated that BlackRock's proposal might quell the SEC's apprehensions through a surveillance-sharing agreement with Nasdaq for monitoring a spot Bitcoin-trading platform.
Nevertheless, the SEC sent back the filings, pinpointing the absence of a specified spot Bitcoin exchange for a surveillance-sharing agreement and insufficient details on these arrangements. Asset managers are allowed to modify and re-submit their applications.
Interestingly, the crypto market experienced a surge since mid-June when BlackRock filed for an ETF that would hold actual Bitcoin. Bitcoin prices soared by approximately 20%, breaking the $30,000 mark for the first time since April. Additionally, Coinbase Global, which is slated to be the custodian for BlackRock’s fund holdings, witnessed its shares skyrocket by over 30% during the same period.
This bullish activity led to a cascade of applications from both traditional and crypto asset managers, such as Fidelity Investments, Ark Investment Management, Invesco, WisdomTree, Bitwise Asset Management, and Valkyrie.
An ETF that directly tracks Bitcoin prices would be a groundbreaking development, as it would grant investors broader access to the cryptocurrency, enabling them to trade Bitcoin through brokerage accounts just like stock shares.
The SEC, however, has a history of rejecting such funds since 2017, citing susceptibility to fraud and market manipulation. There are already several ETFs in the market that own Bitcoin futures, but none that track the spot price.
BlackRock, being the largest money manager globally, was considered the most promising contender for securing approval for a spot Bitcoin ETF, given its exemplary track record with applications. Many speculated that BlackRock's proposal might quell the SEC's apprehensions through a surveillance-sharing agreement with Nasdaq for monitoring a spot Bitcoin-trading platform.
Nevertheless, the SEC sent back the filings, pinpointing the absence of a specified spot Bitcoin exchange for a surveillance-sharing agreement and insufficient details on these arrangements. Asset managers are allowed to modify and re-submit their applications.
