SEC’s Perfect Bitcoin ETF Rejection History: Does Cboe VanEck SolidX Have A Shot?
The deadline for the United States Securities and Exchange Commission (SEC) to decide whether the VanEck ETF proposal will pass or not is September 30. This means one thing: this month will be pivotal for Bitcoin.
So far, the SEC has decided to go against many ETFs. Direxion had a total of 5 ETFs rejected while GraniteShares and ProShares had their own rejected too. Will this new one stood a chance? Also, what are the reasons that are getting in the way of the world finally getting its Bitcoin ETF? You can discover all that by reading the article.
Winklevoss Twins ETF Proposals
Tyler and Cameron Winkevoss, which are twins, have failed to establish a Bitcoin ETF. In fact, they are even barred from trying to establish another Bitcoin ETF after the SEC decision. The well known twins have founded the powerful Gemini Exchange and have links with the beginning of Facebook.
The twins have proposed the ETF, which was rejected by the SEC twice after they appealed. The news upset the crypto market and they are unable to try again. The SEC has rejected the proposal by saying that they had concerns over market manipulation.
ProShares, Direxion And GraniteShares ETF Proposals
The ProShares Bitcoin ETF, which was rejected by the SEC on August 22 never stood a chance. The ETF intended to incorporate leverage trading in Bitcoin, which is already considered to be volatile. Because of this, it never had a lot of chances for success.
The ETF would be backed by nine-month Bitcoin futures and, because of this, the proposal was a clear no for the SEC and it was rejected as expected for the investors.
Direxion and GraniteShares ETFs also followed the same principle of being guided by Bitcoin futures, which was also their downfall. As Bitcoin futures were only started to be traded on CME and CBOE last year, the SEC is still very wary of manipulation and it believes that the futures are not a good option.
Why? Because their size is still very small and they are still very new. It looks like the approval of the SEC would need something more substantial to actually approve a Bitcoin ETF this time.
This history leads us to the new VanEck-SolidX ETF, the most recent Bitcoin ETF to have any chance of being approved. As the deadline for the approval was extended, this is already a great sign that they are at least paying attention and that the material is worthy. Our team has defined a total of three key factors that could contribute to the approval of the ETF.
The first point is that the ETF would be backed with real Bitcoin instead of Bitcoin futures. This makes it different from the ones that came before because it gives it a chance to be approved.
Secondly, the ETF is supported by the Chicago Board of Exchange (CBOE), which has already launched Bitcoin futures. To be backed by an important entity can definitely make a difference for the SEC because the institution has a long history in the markets and there will be considerably less space for manipulation.
Finally, the company behind the ETF, VanEck, has been established since 1995 as a company with a great reputation in the industry. SolidX might be a startup, but having the backing of VanEck and CBOE can make all the difference.
While the current deadline is September 30, the SEC can postpone the decision again if the institution is still undecided.
The Future For ETFs
Even if the VanEck SolidX Bitcoin ETF fails to convince the SEC, there are already many plans in motion at this moment. Bitwise Asset Management Inc has already created a Bitcoin index fund and has been planning an ETF for some time now.
There is also the Coinbase BlackRock partnership which could put together two important companies and would also stand a good chance. As BlackRock is a pioneer in the ETF market, they would certainly be prepared.
It looks like the Bitcoin ETF will be a reality in the future. The only doubt is when exactly.