Wednesday, January 19

US CVM Denies WisdomTree Bitcoin ETF Request | Bitcoin Portal

This Thursday (2), the US Securities and Exchange Commission (or SEC) rejected another request for a fund index (or ETF) bitcoin (BTC).

The SEC denied that financial services firm WisdomTree listed its ETF, saying in a paper, which did not meet the criteria “created to prevent fraudulent and manipulative practices and acts” and “to protect investors and the public interest”.

An ETF is an investment tool that allows investors to buy stocks that represent an asset.

A bitcoin ETF allows investors to gain exposure to bitcoin without having to buy cryptocurrency from a broker and store it in a crypto portfolio (something some investors still believe is too complicated).

There is demand for a bitcoin ETF among cryptocurrency investors, but the SEC has rejected several requests for such a product.

Under the leadership of Gary Gensler, the SEC chairman, the commission allowed bitcoin futures ETFs to begin trading. These products allow investors to buy shares linked to contracts that bet on the future price of bitcoin.

The futures market is already regulated by the Commodity Futures Trading Commission (or CFTC), unlike the “spot” market, which perhaps explains why the SEC allowed only bitcoin futures ETFs to reach the market.

Initially, bitcoin futures ETFs were greeted with enthusiasm by the market: ProShares’ Bitcoin Strategy ETF traded nearly $1 billion worth of shares on its launch when it began trading on the New York Stock Exchange (or NYSE) in October .

Competitors who have since launched similar products have not been as successful.

WisdomTree, a New York ETF promoter and asset manager, also submitted a request to the SEC to list an ether ETF (ETH) that would track the second-largest cryptocurrency by market capitalization.

There is a long list of large companies awaiting a response from the SEC on their ETF requests, but there is one high improbability: so far, the SEC has rejected all requests.

*Translated and edited by Daniela Pereira do Nascimento with permission from Decrypt.co.



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