The U.S. Securities and Exchange Commission (SEC) has called recent attempts to establish a spot Bitcoin Exchange Traded Fund (ETF) insufficient, leading to a significant tumble in the price of the premier cryptocurrency, reported the Wall Street Journal (WSJ) on Friday.
Following the news, the value of Bitcoin (BTC) experienced a swift $1,000 drop, marking a 3% reduction within a few moments. By the time of the press release, the cryptocurrency was floating marginally above the $30,000 mark.
According to the WSJ story, the SEC has flagged concerns to Nasdaq and CBOE, the two exchanges responsible for filing the spot ETF paperwork for several asset managers, including industry heavyweights BlackRock and Fidelity. The regulator pointed out that the applications lacked clarity and completeness.
The filings were particularly deficient regarding the specifics of “surveillance-sharing agreements,” which includes the choice of the spot bitcoin exchange to be utilized. However, asset managers could revise their applications and resubmit them. CBOE has already indicated to the WSJ its intention to proceed with this course.
BlackRock’s filing in mid-June catalyzed a substantial upswing in Bitcoin value, pushing the cryptocurrency from below $26,000 to one-year highs above $31,000. BlackRock’s application prompted a wave of filings from other asset managers, including Invesco and Fidelity. After the BlackRock submission, these asset management giants refiled their previously rejected spot bitcoin ETFs for approval.
In the dynamic landscape of digital currencies, Bitcoin stands as the foremost player. Yet, with the latest critique from SEC, this pioneer cryptocurrency has taken a substantial hit. The market trembled with the SEC’s assertion that the steps towards a Bitcoin spot ETF lacked robustness. The SEC’s pronouncement is a stark reminder that legitimizing a Bitcoin ETF is long and arduous. The efforts put forth by the cryptocurrency community were deemed insufficient. This verdict from SEC has engendered widespread uncertainty, causing significant fluctuations in Bitcoin’s price.
