Spot Bitcoin ETF: VanEck submits a new application

TL;DR Breakdown
  • The application comes almost eight months after the SEC rejected the investment firm’s previous application.
  • Applicants’ ability to manipulate the market is an area of concern for the SEC, and the watchdog aims to protect investors.

Securities and Exchange Commission has received a new application from investment firm VanEck for a Spot Bitcoin ETF. It’s eight months since the SEC rejected VanEck’s prior application and only a day after declining Grayscale Investments’ and Bitwise’s Spot Bitcoin ETF applications. 

Despite approving many Bitcoin futures ETFs, the SEC has consistently voiced concerns about applicants’ capacity to manipulate the market. Therefore, looking to safeguard investors.

VanEck hopeful for SEC approval

VanEck stated that the Spot markets for the commodities and currencies it has previously granted Spot ETFs are often unregulated. VanEck also said that the Commission relied on the underlying futures market as the regulated market of significant scale. 

All of which served as the foundation for the approval of the series of currency and commodity-based trust shares. They include platinum, silver, copper, gold, palladium, and other commodities and currencies.

The assets that make up a Spot Bitcoin ETF are tied to the Bitcoin price. Those who favor the adoption of a Spot Bitcoin ETF claim the product will make investing in Bitcoin more affordable and accessible to consumers and institutions alike.

Progression of the Bitcoin ETF in the United States

Many people look to the United States as an example to get enthusiastic about a Bitcoin exchange-traded fund. But unfortunately, over the last few years, the SEC has rejected more than a dozen applications. 

As a result, it makes it difficult for companies to gain approval. Everything looked bleak for a long time, but things are looking up in 2022. In October 2021, The SEC gave the ProShares Bitcoin Strategy ETF, the first Bitcoin futures ETF, its OK. In April 2022, it also approved the Teucrium Bitcoin Futures ETF.

As of this writing, the chances of approval of a Spot Bitcoin ETF by the SEC appear to be slim. However, this move has given some cryptocurrency investors hope. Grayscale Investments had wanted to transform its Bitcoin Trust (GBTC) into a Spot Bitcoin ETF. However, the SEC rejected both Bitwise and Grayscale’s applications on June 29, 2022.

In rejecting the filing, the SEC cited concerns about market manipulation. Responding to the SEC’s order, there is a lawsuit against the Securities and Exchange Commission by Grayscale in the District of Columbia Circuit.

It appears unlikely that U.S. investors will soon access a Bitcoin ETF, although a few companies have re-filed applications with the SEC.

Does owning a Bitcoin outweigh a Bitcoin ETF?

To sum it up, there isn’t a single ultimate answer to it. Every investor has their own unique set of wants and needs. There is no ownership of Bitcoin in an ETF, but it provides the essential price exposure. 

If you’re worried about Bitcoin or want an easy way to diversify your holdings, an ETF may be a better option. People who desire to trade, use BTC as a currency, or explore cryptocurrencies in other ways benefit from having Bitcoin.

The SEC has not yet approved Spot Bitcoin ETFs, but anyone can acquire Bitcoin after establishing their identification from an exchange, broker, or ATM. In addition, Bitcoin futures-based ETFs exist, but price exposure alone may not be enough for everyone.

The ability to trade in Bitcoin ETFs

While the US hasn’t authorized any Bitcoin ETF, it already exists in other countries. Still, VanEck is hopeful they will get approval. Several companies have launched Bitcoin ETFs in different countries because of the growing popularity of the cryptocurrency industry. Examples of notable cases include:

Canada: 3IQ Coinshares, CI Galaxy Bitcoin, and Purpose Bitcoin.

Europe: VanEck Bitcoin ETN, Iconic Funds, BTCetc – ETC Group Physical Bitcoin, 21Shares Bitcoin ETF, Bitpanda Bitcoin ETC, and Bitpanda Bitcoin ETF.

Brazil: Bitcoin ETF from QR Capital.

Nellius Irene

Nellius Irene

Nellius Irene is a cryptocurrency investor and journalist who has been in the nascent space since 2018. She has researched and written on several crypto-related topics including non-fungible tokens (NFTs), decentralized finance (DeFi), fundraising, mining, etc. Her major focus is covering regulatory events that are capable of shaping the entire crypto ecosystem.

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