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Crypto industry spurned once again as SEC rejects two Bitcoin ETF proposals

The Crypto industry spurned once again as SEC rejects two Bitcoin ETF proposals. Regulators have turned down two proposals to offer physically-backed Bitcoin exchange-traded funds, delivering a bag of coal to crypto fans just in time for the holidays.

SEC rejects two Bitcoin ETF proposals

Crypto industry spurned once again as SEC rejects two Bitcoin ETF proposals

Image Source: Cryptoknowmics

The Securities and Exchange Commission said on Wednesday that Valkyrie Investments and Kryptoin’s proposals failed to meet the SEC’s standards for preventing fraudulent and manipulative conduct.

In October, it permitted futures-backed Bitcoin ETFs to be issued. The SEC’s earlier-than-expected decision could mean that a pure Bitcoin fund approval in 2022 isn’t in the cards either.

According to Eric Balchunas, a Bloomberg Intelligence analyst, the deadline for a decision on the two fund proposals was Jan. 7, which he likens to a “Scrooge-jection.” The announcement comes less than a month after the SEC rejected VanEck’s proposal for a spot Bitcoin ETF.

“We were bullish about futures, but we’re not confident in a 2022 approval,” Balchunas said, citing the reason that the SEC is disapproving faster than it needs to.

For investment fund providers, launching the first spot-Bitcoin ETF remains the holy grail, as such products are seen as an entry point into crypto for millions of individual investors. ProShares Bitcoin Strategy, the first Bitcoin futures ETF, attracted $1 billion in investor inflows shortly after its debut.

On January 22, the SEC will rule on First Trust/proposed Skybridge’s spot-Bitcoin ETF, followed by Fidelity’s on January 27. The prospects of those getting approved are slim, according to Bloomberg Intelligence analyst James Seyffart, who joked in a meme depicting the SEC as the Grim Reaper knocking on First Trust and Skybridge’s door.

According to Bloomberg Intelligence statistics, the number of crypto-tracking investment vehicles has more than doubled to 80 from just 35 at the end of 2020. Assets increased to $63 billion from $24 billion at the beginning of the year.

For investment fund providers, launching the first spot-Bitcoin ETF remains the holy grail, as such products are seen as an entry point into crypto for millions of individual investors. ProShares Bitcoin Strategy, the first Bitcoin futures ETF, attracted $1 billion in investor inflows shortly after its debut.

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Also read: Cryptocurrency mining malware infects illegal copies of “Spider-Man: No Way Home”

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