The SEC rejected Valkyrie and Kryptoin applications for publicly traded spot bitcoin funds but, two months ago, the SEC allowed Valkyrie to release a bitcoin futures fund on Nasdaq.
The SEC once again rejected applications for spot or spot bitcoin exchange-traded funds (ETFs). This time Valkyrie and Kryptoin fell victims to this ban.
Under the same argument the entity used in the past, the SEC detected that the Valkyrie and Kryptoin funds “did not show enough consistency in preventing fraudulent and manipulative practices. Thus, the entity assures that the rejection decision responds to its intention to “protect investors and the public interest.”
This situation has become repeated news. The SEC has been looking with doubtful eyes the bitcoin spot ETF proposals for at least eight years. It even continues to generate controversy this year after allowing three bitcoin futures funds (also called “paper”) to go public for the first time based on contracts on speculative prices rather than the current value of the stock.
2021 Reaches its End with no US Bitcoin Spot ETFs
The Bloomberg ETF research analyst expressed that he was in some way surprised by the SEC’s decision, as he doesn’t understand its motives. Congressmen Tom Emmer and Darren Soto said that it makes no sense to allow future ETFs and not spot ones, as they carry the same level of risk. Futures can even get interpreted as riskier, considering that we do not know what will happen next.
James Seyffart revealed via Twitter an image depicting the latest bitcoin funds that the SEC ‘murdered’, with Kryptoin and Valkyrie being the last. The drawing also shows the next ones appearing on the list, First Trust and Skybridge since they will have their verdict before January 22.
The rejection that impacts Valkyrie and Kryptoin means that 2021 will end without any spot bitcoin ETFs as they were the last requests of the year. Although, it is worth clarifying that Valkyrie did acknowledge two months ago that the SEC allowed its bitcoin exchange-traded fund based on speculative future prices.
The Valkyrie Funds (BTF) bitcoin futures ETF met their launch on Nasdaq on October 22. The exchange-traded fund moved at least $ 10 million in the first 5 minutes. Valkyrie tracks the value of the Chicago Mercantile Exchange (CME) BTC futures market.
BTF was the second strategic bitcoin ETF to get approved by the United States Securities and Exchange Commission (SEC). This approval arrived after ProShares launched its BITO product, with which it debuted on the New York Stock Exchange (NYSE) 3 days ago.
The ProShares ETF started with at least 30 million traded. Bloomberg analyst Eric Balchunas said on Twitter that users have to be happy with that spread if they are at BTF, even if it will be hard to keep up.
The analyst also points out that the ProShares product has an edge in the game due to early approval. Although he also believes that, after all, BTF started with the expectation that it would also dominate the current market.
By: Jenson Nuñez
