According to a source familiar with the matter, the US Securities and Exchange Commission (SEC) has expressed concerns regarding recent applications for spot bitcoin exchange-traded funds (ETFs) submitted by asset managers. The applications were filed by Nasdaq and Cboe Global Markets on behalf of major firms including BlackRock and Fidelity. The SEC deemed the applications to be lacking in clarity and comprehensiveness. Following the publication of the SEC’s rejection by the Wall Street Journal, the price of bitcoin, which had surged since BlackRock’s application, fell 1% to $30,142. Despite the report, the SEC, Fidelity, BlackRock, and Nasdaq declined to comment, while Cboe was unavailable for immediate comment.
Investors had high hopes for a bitcoin ETF approval by the SEC after these major firms filed their applications. The filings sparked renewed interest in cryptocurrencies, as the market had been impacted by a series of failures among cryptocurrency companies, including the sudden collapse of FTX exchange in late 2022. However, the SEC has consistently rejected numerous spot bitcoin ETF applications in recent years, citing insufficient measures to prevent fraud and manipulative practices, as well as protect investors and the public interest.
To address these concerns, BlackRock and Fidelity proposed a surveillance mechanism to prevent manipulation in their filings. However, they did not specify which bitcoin exchange would be involved. The SEC’s decision led to a decline in blockchain-related stocks, with Coinbase, Riot Platforms, and Marathon Digital experiencing 3-3.7% decreases.
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