The United States Securities and Exchange Commission (SEC) has once again disapproved a Bitcoin exchange-traded fund (ETF) proposal, this time from asset manager VanEck. The proposal sought to create the VanEck Bitcoin Trust, which would have been traded on the Cboe BZX Exchange.
This is not the first time that VanEck has tried to launch a Bitcoin ETF. In 2018, the firm submitted a proposal to the SEC for a physically-backed Bitcoin ETF, but it was eventually withdrawn after a prolonged review period.
The SEC has repeatedly cited concerns about market manipulation, custody, and liquidity as reasons for disapproving previous Bitcoin ETF proposals. The SEC has also expressed concern about the lack of regulation and oversight in the crypto market, which could lead to investor harm.
In their disapproval order, the SEC’s commissioners argued that approving a Bitcoin ETF would be inconsistent with the SEC’s previous decisions to deny other Bitcoin ETF proposals. They also stated that they had not seen sufficient evidence to demonstrate that the Bitcoin market is resistant to manipulation.
The commissioners’ decision has been criticized by many in the crypto industry, who argue that the SEC is applying a double standard to Bitcoin ETFs. They point out that the SEC has already approved ETFs for other commodities, such as gold and silver, which are also subject to market manipulation and volatility.
Conclusion:
Despite the SEC’s disapproval, many in the crypto industry remain optimistic about the future of Bitcoin ETFs in the United States. Some believe that the SEC will eventually approve a Bitcoin ETF once the market matures and regulatory oversight is improved. Others believe that the approval of a Bitcoin ETF is inevitable, given the growing institutional interest in cryptocurrencies and Bitcoin’s increasing mainstream adoption.
In the meantime, investors who want exposure to Bitcoin can invest in publicly-traded companies that hold Bitcoin on their balance sheets, such as Tesla and MicroStrategy, or in Grayscale’s Bitcoin Trust, which is currently the largest Bitcoin investment vehicle available to U.S. investors.
