As foreseen by yesterday’s article on Crypto Traders Pro, the SEC have indeed rejected the latest round of Bitcoin ETF applications. The Commission made the announcement a day ahead of the deadline, perhaps to second guess the still fragile crypto markets. In total no less than nine ETF proposals from three different firms were rejected, as the bonfire of the applications continues. On this occasion the firms in question were ProShares and Direxion, seeking listing on the NYSE, and GraniteShares, with an application for a place on the CBOE asset list.
Whilst each proposal was addressed individually, a number of core themes are emerging from the SEC’s comments with regards to the repeated refusals. Chief amongst them are concerns around price manipulation and the potential for fraud in a still evolving space. One of the SEC’s statements asserts that there remain doubts that the ETF proposals are “consistent with the requirements of the Exchange Act Section 6(b)(5),” and specifically questions whether there are sufficient safeguards “to prevent fraudulent and manipulative acts and practices.” There are no less than 15 incidents of the word “manipulation” in the various statements.
Markets reacted rather more calmly than to similar news of late, with Bitcoin holding firm. At time of writing the altcoins continue to slide, though it’s unclear to what extent this price action was correlated with the announcement. Social media seemed underwhelmed with the news, with many continuing to focus on the VanEck and SolidX application, deemed a rather more serious proposition by the majority of industry insiders. Overall prices continue to struggle, however, and there appears no reversal in sight just yet with total market cap still sitting below $210 billion.
