The SEC Denied VanEck’s Proposal for a Spot Bitcoin ETF

Key takeaways:

  • The SEC denied VanEck’s proposal for a spot Bitcoin ETF which caused Bitcoin to drop to 62353 US dollars.
  • The price has fallen 9.7% since hitting a new all-time high of $ 69,000 on November 10.

On Friday, the Securities and Exchange Commission denied VanEck’s registration for a long-awaited spot bitcoin ETF, citing concerns about possible misconduct and manipulation in the cryptocurrency industry.

The SEC denied a petition to amend the rules of the Cboe BZX exchange so that shares of VanEck’s Bitcoin Trust may be listed and traded, according to a filing on Friday. “Any rule change that favors ETF approval, according to the SEC, would not be “designed to prevent fraudulent and manipulative acts and practices” or “to protect investors and the public interest.”

The proposed rule modification, in particular, failed to fulfill the requirement that the national securities exchange’s regulations be tailored to detect malicious and manipulative activities as well as to safeguard the public interest.

“Commission concludes that BZX has failed to meet its obligation under the Exchange Act and Commission Rules of Practice to demonstrate that its proposal complies with the requirements of the Exchange Act section,” SEC stated and proceeded to claim:

The SEC Denied VanEck’s Proposal for a Spot Bitcoin ETF

     “IT IS ESSENTIAL THAT A STOCK EXCHANGE LISTING A SECURITIES DERIVATIVE ENTERS INTO A SURVEILLANCE SHARING AGREEMENT WITH THE MARKETS TRADING THE UNDERLYING ASSETS FOR THE LISTING EXCHANGE TO HAVE THE ABILITY TO OBTAIN THE INFORMATION NECESSARY TO DETECT, INVESTIGATE AND DETER FRAUD AND MARKET MANIPULATION, AS WELL AS VIOLATIONS OF STOCK EXCHANGE RULES AND APPLICABLE FEDERAL SECURITIES LAWS AND RULES.”

The decision is in line with previous remarks from SEC Chairman Gary Gensler. He stated that a futures-based bitcoin ETF would be preferable rather than one that invests directly in the underlying cryptocurrency.

After the extensions on April 28 and September 8, the SEC had a maximum of 240 days to accept or reject the offer after being published in the Federal Register on March 19, giving it until November 14 to decide. However, the SEC was extremely unlikely to accept the VanEck fund, according to Bloomberg Sector Expert Senior ETF Analyst Eric Balchunas, given the SEC’s track record of rejecting bids from investment firms with a crypto exposure. Unfortunately, this forecast proved to be correct.

While many investors may be disappointed by the decision, the SEC has already authorized ETFs connected to Bitcoin futures. Last month, the ProShares Bitcoin Strategy ETF became the quickest ETF ever to acquire more than $1 billion in assets, indicating actual demand for bitcoin among investors.

What Caused Bitcoin’s Price to Fall From All-Time Highs?

Crypto margin (overwhelmingly BTC, but some platforms allow alternative altcoins to be used as collateral) or dollars/stablecoins can be used as collateral in bitcoin futures markets.

After a drop from an all-time high of $68,950 yesterday, Bitcoin (BTC) is settling. Despite short-term market volatility, many foresee more potential for cryptocurrencies.

In an email to CoinDesk, DailyFX analyst Nicholas Cawley wrote: “Volatile market swings are always around the corner.” According to Cawley, Longer-term traders in BTC and ETH may leverage the current sell-off to strengthen their holdings as the sentiment going forward remains positive

Bitcoin’s price dipped short to $ 62,300 before rising to over $ 63,000 due to the effect. Bitcoin’s price has dropped 9.7% since hitting a new all-time high of $ 69,000 on November 10.

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Aadrika Sharma

I enjoy writing and try to learn new things every passing day!