Reflecting on the past year, 2021 has been great for Bitcoin and the cryptocurrency market. Two BTC futures ETFs were born in the USA. However, American investors may not be able to spot them all before the end of the week.
SEC In no Mood For Spot Bitcoin ETFs
According to the official document, the SEC rejected physically-backed Bitcoin ETFs proposed by Valkyrie and Kryptoin. Similar market manipulation concerns were cited by the regulator while referring both to trade shares and list shares of Valkyrie Bitcoin Fund as well as Kryptoin Bitcoin ETF Trust.
Valkyrie just got Genzinated. 4th spot disapproval. Too early, just in time for their Xmas. Could be more coming.. https://t.co/amMarvHzaM
— Eric Balchunas (@EricBalchunas) December 22, 2021
It stated that the proposals failed to meet its standards designed to protect the public and market players from fraudulent and manipulative acts.
The two entities that submitted rule modifications to allow the listing and trading of the ETFs were NYSE Arca (and Cboe BZX Exchange). The Commission stated that neither entity had met the Exchange Act’s burden nor the Commission’s Rules of Practice to show that their proposal was consistent with Section 6(b).5 ).”
Besides, the US regulator started a formal review of Kryptoin’s bitcoin exchange-traded fund application in April this year. The rejection is not the first for the Delaware-based company. In 2019, the company failed to get a green signal from the regulatory authorities.
This decision comes after VanEck had applied for a spot Bitcoin ETF, but it was denied by the SEC more than a year ago.
Many investment fund providers in the country are still waiting for the launch of the first spot Bitcoin ETF. However, the latest move isn’t surprising, as SEC Chair Gary Gensler has been very clear about his preference.
BITO Failed to Charm Investors
After years of failed attempts, the SEC finally approved BITO – the ProShares Bitcoin Strategy ETF. The ETF’s trading performance was not as good as the spot price for the underlying asset in the first two months.
According to Bloomberg Intelligence ETF Analyst James Seyffart, BITO was trailing spot by 2. 34% with just about two months of data. Going forward, Seyffart believes the fund will continue to underperform spot by 13-14% in its first year. The fund and asset are vastly different. Many financial advisors will recommend it.
However, long-term investors believe that offerings with smaller allocations to BTC futures could be more dominant in the next year.
Featured Image Courtesy of CNN