Looking back at the year 2021, it is clear that the cryptocurrency market and Bitcoin have had a great year. Two BTC futures ETFs were created in the USA. However, American investors may not be able to spot them all before the end of the year.
SEC is not in a mood for Spot Bitcoin ETFs
According to the official document, both Kryptoin and Valkyrie proposed physically-backed Bitcoin ETFs. Similar market manipulation concerns were cited by the regulator while referring both to trade and list shares of Valkyrie Bitcoin Fund, and Kryptoin Bitcoin ETF Trust.
Valkyrie just got Genzinated. 4th spot disapproval. It was too early, just in the right time to ruin their Xmas. Could be more coming.. https://t.co/amMarvHzaM
— Eric Balchunas (@EricBalchunas) December 22, 2021
It said that the two proposals failed to meet its standards for preventing fraudulent and manipulative practices and protecting the public interest.
Cboe BZX Exchange and NYSE Arca were the entities that submitted rule modifications to allow them to trade and list the ETFs. The Commission stated that neither entity had met the Exchange Act or the Commission’s Rules of Practice requirements to show that their proposal was consistent with Section 6(b),(5).
In April 2018, the US regulator began a formal review on Kryptoin’s application for bitcoin exchange-traded funds. The rejection is not the first for the Delaware-based company. The company did not receive a green light from regulatory authorities in 2019.
This decision comes nearly a month after VanEck was denied a spot Bitcoin ETF application by the SEC.
Many investment fund providers in the country are still waiting for the launch of the first spot Bitcoin ETF. The latest move is not surprising as Gary Gensler, SEC Chair, has made it clear that he prefers the spot-Bitcoin ETF.
BITO fails to charm investors
After many failed attempts, the SEC approved BITO – the ProShares Bitcoin Strategy Exchange Traded Fund. The ETF’s trading performance was not as good as the spot price for the underlying asset in the first two months.
James Seyffart Bloomberg Intelligence ETF Analyst, BITO was showing a trailing spot of 2.34% after only two months of data. Seyffart predicts that the fund will continue to outperform spot by 13-14% over its first year. The fund and asset are vastly different. Many financial advisors will recommend it.
Some long-term investors believe that offerings with a lower allocation to BTC futures could be more dominant in the next year.
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