On Thursday, the U.S. Securities and Exchange Commission (or SEC) rejected a request for a spot market bitcoin (BTC) index fund (or ETF) from managers First Trust Advisors and SkyBridge.
The First Trust Advisors and SkyBridge order was submitted in May 2021.
The two investment firms teamed up to try to get approval for their ETF, but the regulator he said that the fund did not meet “the requirements that the rules of a national securities brokerage be ‘created to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest’”.
Anthony Scaramucci, former White House communications director who runs SkyBridge Capital, had here to the Decrypt that he was hopeful that the SEC would approve a bitcoin ETF by the end of 2021.
“I hope that Gary Gensler’s introduction now to the regulatory rubric and my understanding of where he’s coming from, despite not knowing him personally, is that we could possibly have an ETF approved by the end of the year,” he said at the time, referring to the new leader of the SEC.
But a bitcoin ETF does not yet exist in the US because the SEC is reluctant to approve it, citing concerns about possible price manipulation in the cryptocurrency market.
An ETF is an investment product that allows investors to buy stocks that represent an asset, such as gold. With an ETF, investors do not deal directly with the asset.
In this case, a bitcoin ETF allows people to invest in the cryptocurrency without having to deal with aspects such as storing the digital asset.
However, the option to gain exposure to bitcoin through an ETF exists for traditional investors.
In October, the SEC allowed the first bitcoin futures ETFs to begin trading, and these products were met with great enthusiasm by investors.
Trading volume for bitcoin futures ETFs has since weakened, along with the rest of the crypto market, as the price of bitcoin, ether and other major cryptocurrencies has dropped sharply.
Futures ETFs are different from spot market ETFs: their shares represent contracts that bet on the future price of bitcoin, not the asset itself, and trading in these derivative products is regulated by the Commodity Futures Trading Commission (or CFTC) .
*Translated and edited by Daniela Pereira do Nascimento with permission from Decrypt.co.
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