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The Securities and Exchange Commission has rejected the VanEck Bitcoin ETF.
The filing was done by the CBOE BZX Exchange, which wanted the SEC to make a rule change allowing it to list the VanEck bitcoin fund. The SEC said the CBOE had not done enough to demonstrate it could prevent fraudulent trading to protect investors.
That rationale is in line with previous rejections by the SEC of proposed ETFs that would track bitcoin directly. Companies have been vying to release the first U.S. bitcoin ETF for almost 10 years but the SEC has been slow to embrace one, citing concerns about the lack of regulation and the potential for fraud and manipulation in the bitcoin market.
There are currently several other similar bitcoin ETF applications awaiting decisions.
The rejection comes weeks after the SEC gave the greenlight for the first futures-based bitcoin ETFs to begin trading: the ProShares Bitcoin Strategy ETF, which began trading Oct. 19 and saw a 4% pop on day one, and the Valkyrie Bitcoin Strategy ETF, which began trading Oct. 22.
For many investors, these products aren’t as favorable as an ETF tracking bitcoin directly would be, but some see it as an important stepping stone to one somewhere down the road.
A rush of applications for futures-based ETFs came this year shortly after SEC Chairman Gary Gensler took the helm of the agency and soon after made clear that he’d be more open to a futures-based product. Several more bitcoin futures ETFs are also awaiting for the go-ahead from the SEC to begin trading.
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