SEC of United States Rejects VanEck Spot Bitcoin ETF Proposal

After approving two Futures based Bitcoin ETFs in October, the SEC disapproves of VanEck’s Spot ETF several months after the initial filing.

By
Anirudh Tiwari
on
November 13, 2021
Category:
Blockchain News

Spot BTC ETFs Still a No-No for SEC

In a setback to the market’s momentum, the United States Securities and Exchange Commission (SEC) rejected the approval of Van Eck’s spot Bitcoin Exchange Traded Fund (ETF).

The news was confirmed via an official report by the SEC on November 12th. Van Eck filed the application for the spot Bitcoin ETF back on March 1, 2021. The report announcing the disapproval cites that the proposed rule change filed by the CBOE BZX Exchange to list and trade shares of VanEck BTC Trust “didn’t meet its burden under the Exchange Act and the Commission's Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5)."

“We are disappointed in today’s update from the SEC declining approval of our physical bitcoin ETF.  We believe that investors should be able to gain #BTC exposure through a regulated fund and that a non-futures ETF structure is the superior approach,” exclaimed Jan van Eck, Chief Executive Officer of VanEck, via a Twitter post
Source: Van Eck Twitter

The SEC Chief, Gary Gensler, has expressed his support of Bitcoin Futures ETFs in the prepared remarks for The Future of Asset Management North America Conference. However, this outlook by the SEC has been frowned upon by the firms applying for spot ETFs due to the nature of the underlying contract in each of the two scenarios. 

“We see bitcoin futures-based funds as inferior products that have consistently underperformed the Bitcoin price and bring additional complexities in regards to how they must be managed, at a higher cost than ETFs. (..) What the SEC seems to be doing is pushing individual investors into higher-risk, lower quality products to get their Bitcoin exposure instead of sticking with the tried-and-true ETF wrapper,” said Matthew Sigel, head of digital assets research at VanEck, in an interview to Bloomberg.

The disapproval by the SEC led to souring the mood in the markets and leading BTC to below the $64,000 mark, under which it has been trading ever since. The flagship cryptocurrency currently trades at $63,524, with a market capitalization of $1.2 trillion, as per data from CoinMarketCap.


About VanEck

VanEck is an ETF and mutual fund manager that offers global investment choices to investors in asset classes like commodities, natural resources, equities, etc. The firm was launched by John van Eck in 1955 to bring global post-World War II investment opportunities to United States investors. The firm currently has 59 ETFs traded within the U.S. markets amounting to assets under management (AUM) of $64.70 billion, as per data from etf.com.

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Anirudh Tiwari

Anirudh is a cryptocurrency analyst and writer who specializes in derivatives, DeFi, regulations and CBDCs. He has a Master’s degree in Finance. Before delving into crypto, he worked with a leading U.S. based investment bank. Apart from work, he is a music connoisseur and likes to play the drums. His largest holdings in crypto are Ethereum, Cardano, and Polkadot.

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