The United States Securities and Exchange Commission (SEC), has published an official document describing its ruling on the application for a Bitcoin exchange-traded fund (ETF), filed by Bitwise Asset Management and NYSE Arca.
In a not-too-surprising turn off events, the SEC has rejected the Bitcoin ETF application filed by Bitwise Asset Management and NYSE Arca and stated that there were still too many unresolved issues regarding improper activity such as market manipulation, that could easily take place in the sector.
The SEC’s publication is a 112-page document, which goes into specific details of the ETF and why it had chosen not to approve at this time. According to the Commission, the Bitwise and NYSE Arca team, have not done enough to address the SEC’s concerns about market manipulation, especially since the team specified that only 5% of the Bitcoin market is real and un-manipulated.
“Because, among other things, the [Bitiwse and NYSE Arca team] has asserted that 95% of the Bitcoin spot market consists of fake and non-economic activity, but has not established that it has in fact identified the “real” Bitcoin market, or that the “real” Bitcoin market is isolated from the fraudulent and manipulative activity, we find, in each case, that NYSE Arca has not met its burden to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and therefore the Commission disapproves this proposed rule change.”
So far, the SEC has not approved any Bitcoin ETF applications and with the Bitwise filing also rejected, there is now no chance that there will be a Bitcoin ETF in 2019. Bitwise and NYSE Arca first filed in January this year, and was the last application standing after the Cboe team withdrew its own filing last month, for the VanEck and SolidX ETF.
In a series of tweets as well as an official press release, Bitwise has commented on the SEC’s disapproval of its’s Bitcoin ETF. Bitwise thanked the SEC for its carefully detailed response to its filing and explains that even though it’s a disapproval, it’s a positive step in the right direction and should be regarded as progress.
Furthermore, Bitwise notes that “first-of-a-kind ETPs” including “bonds, gold, non-transparent, leverage” usually don’t happen quickly and historically takes more than a few years. The company notes that as long as the SEC continues its responsibility of providing analysis and protecting investors, the industry will mature. Bitwise then reiterates its commitment to the cause and promises to try again.
“The journey continues. We’re committed to continuing to engage with the SEC to provide the data & analysis that shines light on the industry and its progress. The 112 pages today show the areas of focus. We’ll re-file when the time is right.”
Even though the disapproval can be seen as a bit of a blow to the crypto market, there has been no recorded crashes so far in response. What has been recorded, however, is a price jump by the two largest assets in the market. Both Bitcoin (BTC) and Ethereum (ETH) increased by 5% and 6% respectively.