The U.S. Securities and Exchange Commission (SEC) rejected Bitcoin ETF applications from ProShares, GraniteShares, and Direxion – nine ETFs in total – earlier Wednesday. The decision comes on the heels of the commission’s rejection of the Winklevoss-backed Bitcoin Shares ETF late last month.
- ProShares Bitcoin ETF and ProShares Short Bitcoin ETF
- GraniteShares Bitcoin ETF and GraniteShares Short Bitcoin ETF
- Direxion Daily Bitcoin Bear 1X Shares, Direxion Daily Bitcoin 1.25X Bull Shares, Direxion Daily Bitcoin 1.5X Bull Shares, Direxion Daily Bitcoin 2X Bull Shares, and Direxion Daily Bitcoin 2X Bear Shares Under NYSE Arca Rule 8.200-E
This latest round of rejections is another marks the latest in a series of of blows dealt to the digital currency by the SEC.
In late July, the Winklevoss-backed Bitcoin Shares ETF was rejected for the second time, and just last week, the SEC announced that it would be postponing its decision on the VanEck Bitcoin ETF until September 30. The latter caused Bitcoin prices to plummet by more than 4 percent within minutes of the announcement. Prices continued to drop by yet another 4 percent over the next five hours.
Rejection on What Grounds?
The reasons given for rejecting the ETFs were practically boilerplate, although the SEC did note that “its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.”
The reasoning behind the SEC’s decision was the same for each applicant:
…the Commission is disapproving this proposed rule change because, as discussed below, the Exchange has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.
The Market and Community React
While Bitcoin had been in a steady decline from its high yesterday of $6819.79 – ostensibly due to anticipation of the SEC’s decision – surprisingly, prices actually seemed to rally a bit following the decisions being made public. At press time, Bitcoin is trading at $6,442.31 – up from today’s earlier low of $6,379.13.
As far as the crypto community is concerned, while there have been a few drama queens – one Twitter user wailed that “Bitcoin will die without ETF” – people appear to be taking the news largely in stride:
The establishment denies ETFs and #bitcoin shrugs it off like it’s nothing
“SEC denies Bitcoin ETF” is the “China bans Bitcoin” of 2018.
— Riccardo Spagni (@fluffypony) August 22, 2018
What are your thoughts on this latest round of rejections by the SEC? Will a Bitcoin ETF ever get approved? Tell us what you think in the comments below.
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