US SEC Shot Down Two Bitcoin ETF Proposals At The End Of 2021

The US SEC shot down two Bitcoin ETF proposals at the end of 2021 and the decade-long wait for a spot ETF is not over yet as we can see more today in our Bitcoin latest news.

Reflecting on the past year, it was great for Bitcoin and the crypto market and it saw the birth of two BTC futures ETFs in the States but with a week remaining until the end of it, the American investors could lose the spot one. According to the official document, the US SEC shot down two BTC ETFs by Kryptoin and Valkyrie as the regulator cited similar market manipulation concerns referring to both the listing and tradign shares of Valkyrie Bitcoin Fund and the Kryptoin BTC ETF trusts.

Valkyrie just got Genzinated. 4th spot disapproval. Early too, just in time to ruin their Xmas. Could be more coming.. https://t.co/amMarvHzaM

— Eric Balchunas (@EricBalchunas) December 22, 2021

It then stated that the two proposals didn’t meet the standard designed to fight off the fraudulent practices as well as protect the market players and the public interest. The two entities that filed to propose modifications to the rules to list and trade the two ETFs were NYSE Arca and CBOE BZX Exchange. The commission noted that both haven’t met their burden under the Exchange Act and the Commission’s Rule of Practice to show that the proposal is consistent with the requirements of Exchange Act Section 6(b)(5).

The US regulator started a review of Kryptoion’s BTC-exchange traded fund application in April but this isn’t the first time that the Delaware-based company faced rejection.
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In 2019, the company failed to get approval from the regulators. The decision came more than a month after the SEC denied VanEck’s application for a Bitcoin spot ETF. The launch of the first spot-BTC ETF remains in limbo for investment fund providers in the country but the latest move is not surprising as SEC chair Gary Gensler was very clear about the preferences.

After a few failed attempts, the SEC approved and BITO as the ProShares BTC strategy ETF but in the first two months of trading, the ETF paled in comparison to the spot price of the asset. As per the reports from Bloomberg ETF Analyst James Seyffart, BITO was trailing spot by 2.34% with two months of data. Seyffart believes the fund will continue to underperform spot by 13-15% in the first year. The gap between the asset the fund is significant and as a result, the financial advisors will opt for it. Long-term investors argue that offerings with a smaller allocation to the BTC futures contracts will emerge as dominant in the coming year.