Key takeaways:
- Due to their lack of thoroughness and clarity, the SEC considered recent applications for spot Bitcoin ETFs unsatisfactory.
- The exchanges either needed to specify the specific Bitcoin exchange with whom they would have a “surveillance-sharing agreement.”
In the United States, there may be a long wait for a Bitcoin exchange-traded fund (ETF) because recent applications from investment managers were deemed insufficient by the Securities and Exchange Commission (SEC).
The Chicago Board Options Exchange (Cboe) and Nasdaq were reportedly informed by the securities regulator that their filings are not “sufficiently clear and comprehensive,” according to the report published by the Wall Street Journal. Asset managers are represented by these exchanges when a financial product is filed.
According to the SEC, the exchanges either needed to specify the specific Bitcoin exchange with whom they would have a “surveillance-sharing agreement” or provide enough information regarding the specifics of those surveillance arrangements. Asset managers can, however, revise the material and resubmit the forms.
Since BlackRock joined the list of firms seeking to debut the first Bitcoin ETF on Wall Street, many applications have been submitted. In order to prevent the likelihood of market manipulation, BlackRock’s application established a “surveillance sharing agreement” in which information regarding market trading and clearing activities is shared across entities.
A similar surveillance agreement was added to Cathie Wood’s ARK Invest and 21Shares’ third application for a spot BTC ETF as a result of BlackRock’s application. Other asset managers that have recently updated or refiled their applications include Valkyrie, Invesco, WisdomTrees, Ark Investment Management, Fidelity Investments, and Bitwise Asset Management. The front-runner in this contest, though, is apparently ARK Invest.
ETFs often trade on exchanges and follow a specific index. A cryptocurrency ETF is a fund that invests in several cryptocurrencies and monitors the price of one or more digital tokens in the cryptocurrency market.
Since 2017, the SEC has rejected spot Bitcoin ETFs. However, financial products are already readily available in Canada. Purpose Bitcoin, 3iQ Coinshares, and CI Galaxy Bitcoin are three significant funds that have all made direct investments in spot Bitcoin.
An ETF that represents the actual price of Bitcoin would revolutionize the market by enabling more individuals to participate in the digital currency. It would make it possible for investors to buy and sell Bitcoin using a brokerage account just like they can with equities.
