The approval of a Bitcoin ETF is regarded by many experts as a holy grail for the trend reversal of the bear market and rising crypto currency rates. Regarding 9 Bitcoin ETFs, for which the SEC announced a reassessment at the beginning of October, the (re)decision could be made in the next few days.
At the end of August, the US Securities and Exchanges Commission (SEC) had already rejected a total of 9 Bitcoin ETF proposals. These were two Bitcoin ETF proposals from ProShares, five Direxion ETFs, all to be listed on the New York Stock Exchange (NYSE) Arca, and two GraniteShares proposals to be listed on the CBOE.
Direxion requested approval for Bitcoin ETFs in collaboration with the NYSE, which would not have traded physical Bitcoin but which would have been linked to Bitcoin’s price and would have allowed long or short positions with leverage. The GraniteShares ETFs, on the other hand, would have traded the Bitcoin futures products available on the Chicago CBOE and CME derivatives exchanges.
All 9 ETFs were rejected in August. Similar to the rejection of the Winklevoss Bitcoin ETF, the SEC also expressed concern about these Bitcoin ETFs that the underlying market is vulnerable to fraud and manipulation. Remarkably, the SEC has used exactly the same reasoning and wording in all of its rejections:
… the Commission rejects this proposed rule change because, as explained below, the stock exchange has not complied with its obligations under the Stock Exchange Act and the Commission’s procedural rules in order to demonstrate that its proposal complies with the requirements of the section on the stock exchange sector 6 b) (5), in particular the requirement that the rules of a national stock exchange be designed to prevent fraudulent and manipulative acts and practices.
At the beginning of October, SEC documents became public that showed that the SEC had begun to review the possible approval of the Bitcoin ETF applications from ProShares, Direxion and GraniteShares.
What happened was that the refusals were due to the Commission delegating the audit to its staff. The staff had acted on behalf of the Commission and rejected the 9 Bitcoin ETFs. However, additional provisions of the regulatory body give the Commission the power to review such “delegated” decisions.
From tomorrow a decision can be made
The documents submitted by the SEC show that all parties concerned have until 5 November to comment on the ETFs. It can therefore be assumed that the SEC will make an announcement tomorrow. Of course, it is also conceivable that the SEC will allow itself a few more days to examine the documents submitted in detail.