SEC Rejects Fidelity’s Bitcoin ETF Bid

Four spot bitcoin ETF applications have been denied in the past two months.

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Reviewed by: Dan Mika
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Edited by: Dan Mika

The Securities and Exchange Commission denied Fidelity’s attempt to launch a spot bitcoin ETF in the U.S., marking the fourth rejection in the past 30 days.

The regulator used the same reasoning in its denial of the fund dubbed the Wise Origin Bitcoin Trust on Thursday as it did for every recent decision, primarily that Cboe Global Markets had not entered into a surveillance-sharing agreement or other fraud prevention measures.

The rejection comes a week after the SEC rejected a joint bid from First Trust and Anthony Scaramucci’s SkyBridge Capital.

Bitcoin ETF proponents have often argued that a surveillance-sharing agreement isn’t necessary because the growth of the CME bitcoin futures market and robust liquidity in the spot markets would act as a buffer against price manipulation, an argument the SEC has repeatedly rejected.

The SEC has denied every request to launch a spot bitcoin ETF since the Winklevoss twins made the first application for such a product in 2013. It has also denied efforts to launch ethereum-based ETFs, along with leveraged or inverse funds tracking bitcoin futures.

It has instead allowed ETFs using bitcoin futures to go through, leading to the ProShares Bitcoin Strategy ETF (BITO), the Valkyrie Bitcoin Strategy ETF (BTF) and the VanEck Bitcoin Strategy ETF (XBTF) to launch in recent months.

The next spot bitcoin ETF application before regulators is the NYDIG Bitcoin ETF, which intends to list on the NYSE Arca. It is due for a final decision by March 16.

 

Contact Dan Mika at [email protected], and follow him on Twitter

Dan Mika is a reporter for etf.com. He has previously covered business for the Ames Tribune and Cedar Rapids Gazette in Iowa, and BizWest Media in Fort Collins, Colorado. Dan holds a bachelor's degree in journalism from Truman State University.