- The price of bitcoin (BTC) plunged by more than 3% on Friday morning after the U.S. Securities and Exchange Commission (SEC) said that recent filings to launch a spot bitcoin ETF are inadequate.
- The SEC’s ruling sent the price of Bitcoin from around $31,000 to just above $30,000 in the space of a few minutes.
According to a report by the Wall Street Journal, the SEC has informed Nasdaq and CBOE – the exchanges that filed the spot ETF paperwork for several of the asset managers, including BlackRock and Fidelity – that the applications aren’t sufficiently clear and comprehensive.
At issue, the report said, is that the filings didn’t have enough detail with respect to the “surveillance-sharing agreements,” including which spot bitcoin exchange would be used. The asset managers can update their applications and refile, and the CBOE indicated to the WSJ that it plans to do so.
The SEC said in previous ETF rejection orders that the sponsor of a bitcoin trust would have to enter a surveillance-sharing agreement with a regulated market of significant size.
A market of significant size is one where anyone trying to manipulate the price of an exchange-traded product has to trade on the same market the exchange-traded product (ETP) is based on, meaning the agreement would let the sponsor and the trading platform identify any wannabe market manipulators.
At present, no federal regulator has oversight of spot bitcoin markets, a state of affairs the Commodity Futures Trading Commission has lobbied to change for years.
The SEC’s ruling is a setback for the hopes of many investors who have been waiting for a spot Bitcoin ETF to be approved. However, it is not the end of the road for spot bitcoin ETFs, and the asset managers who have filed for approval could still resubmit their applications with the necessary information.
The SEC’s ruling is also a reminder of the regulatory uncertainty that still surrounds the cryptocurrency market. As the market matures, it is likely that regulators will take a closer look at it, and this could have implications for the future of spot bitcoin ETFs.
The SEC’s ruling on spot bitcoin ETF filings is a setback for the hopes of many investors, but it is not the end of the road for these products.
The asset managers who have filed for approval could still resubmit their applications with the necessary information. However, the ruling is also a reminder of the regulatory uncertainty that still surrounds the cryptocurrency market. As the market matures, it is likely that regulators will take a closer look at it, and this could have implications for the future of spot bitcoin ETFs.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.