Bitcoin ETFs Rejected by SEC

Bitcoin supporters were distressed on Wednesday when the Securities and Exchange Commission (SEC) declined approval for two bitcoin ETFs. The ETF proposals were filed by ProShares, a division of ProFunds Group that currently manages $29 billion of combined assets. As reported by Coindesk, the SEC also rejected bitcoin ETF proposals from Direxion and GraniteShares on Wednesday. Direxion has proposed five different ETFs, all of which were rejected.

The rejection of the ProShares ETFs comes shortly after the SEC rejected a proposal for the Winklevoss ETF which was hoping to offer trading of physical bitcoin. As with the proposal for the Winklevoss ETF, the SEC stated its apprehensions about fraud and manipulation of the bitcoin markets. The SEC added that the NYSE Arca which filed the ProShares ETF application did not meet the requirements "that a national securities exchange's rules be designed to prevent fraudulent and manipulative acts and practices. Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are 'markets of significant size.'" The rejection of the bitcoin ETF proposal had nothing to do with the validity of bitcoin or blockchain technology as an investable asset. The GraniteShares proposals that were rejected were proposed for trading on the CBOE rather than the NYSE Arca.

There are still several cryptocurrency ETF proposals that have been submitted for SEC approval. According to Coinbase, bitcoin was trading at $6,427.25 as of 10:14 a.m. HK/SIN on Thursday. This price is a decline of 4.94 percent since yesterday, or a $333.76 decline per bitcoin. The cryptocurrency is down 17.04 percent since last month, but it remains up an impressive 53.99 percent since last year, or $2,251.25 per bitcoin.

Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.