The United States Securities and Exchange Commission (SEC) has rejected Fidelity’s Wise Origin Bitcoin Trust Spot Exchange Traded Fund application, reintroducing the stalemate that has bedeviled the anticipation for a spot BTC product to be floated in America. Fidelity Investments filed for the Wise Origin Bitcoin Spot ETF product far back in March 2021 with plans to list on the Cboe BZX Exchange, drawing on the successful launch of a similar product in Canada.
After successive postpone of the decision on the ETF by the SEC in July and December and per the filing issued detailing the rejection, the commission said that BZX exchange “has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section.”
“It is essential for an exchange listing a derivative securities product to enter into a surveillance-sharing agreement with markets trading the underlying assets for the listing exchange to have the ability to obtain information necessary to detect, investigate, and deter fraud and market manipulation, as well as violations of exchange rules and applicable federal securities laws and rules,” stated the SEC ruling.
Apparently, a major challenge that the SEC has always hammered on is the fact that the digital currency ecosystem is not mature enough to proffer tools that can aid swift monitoring of prices in a way that will prevent unforeseen price manipulations. To date, the SEC has remained an antagonizing force to the launch of a Spot Bitcoin ETF product, further compounded with the striking out of Fidelity’s product.
US SEC is Unwinding and Spot Bitcoin is a Matter of Time
Despite the fact that the US SEC has maintained an opposition to Bitcoin ETF linked to the physical coin, the commission should be commended for unwinding some aspects of its rigidity since Gary Gensler came on board as the Chairman.
For the first time in October last year, the commission approved the Bitcoin ETF from ProShares that tracks BTC-linked futures products, which trades on the New York Stock Exchange (NYSE) under the ticker symbol ‘BITO’. In the same vein, Bitcoin futures-based product from Valkyrie has also been approved, leaving just a spot BTC ETF under the radar.
With the SEC loosening its grip on its stance, the lack of clarity is gradually being unraveled and potential Fund managers looking to float a BTC Spot ETF product now know what to improve on to win the heart of the US regulators. With targeted growth and improvement, the US is poised to trail other countries like Germany, Brazil, and Canada in launching a full-fledged Bitcoin ETF product.