The US Securities and Exchange Commission (SEC) has done so Reportedly told exchanges Nasdaq and Cboe that recent applications for spot Bitcoin (BTC) exchange-traded funds (ETFs) from asset managers including BlackRock and Fidelity were not “clear and comprehensive” enough.
Bitcoin ETFs at Risk?
The SEC has rejected several Bitcoin ETF applications in recent years due to concerns about possible fraudulent and manipulative practices associated with the cryptocurrency market.
The agency has stated that the filings do not meet standards established to protect investors and the public interest. In particular, the SEC has expressed concern over the lack of regulation and oversight in the cryptocurrency market, which could make it easier for ill-wishers to manipulate the price of Bitcoin and other cryptocurrencies.
The SEC has also raised concerns about custody and liquidity issues related to cryptocurrency. While some asset managers have tried to address these concerns in their filings, the SEC continues to dismiss them as inadequate. However, several proposed solutions have been put forward to address the SEC’s concerns about Bitcoin ETFs.
One possible solution is using regulated custodians to hold the Bitcoin as a backup to the ETF, which would provide investors with greater oversight and security. Some asset managers have also suggested using futures contracts to track Bitcoin’s price, rather than holding the actual cryptocurrency, which could help solve liquidity issues.
In addition, some have suggested that the SEC could work with industry participants to establish best practices and guidelines for the cryptocurrency market, which could help mitigate risks associated with fraudulent and manipulative practices.
Despite these proposals, the SEC has continued to investigate Bitcoin ETF filings, indicating that more may need to be done to address the agency’s concerns.
The SEC declined to comment on the Wall Street Journal report, while Nasdaq and Cboe were unavailable for immediate comment. The decision is a blow to asset managers’ attempts to launch Bitcoin ETFs, which have been repeatedly blocked by US regulators.
BTC’s price tumble, signals the end of the bull run?
The latest criticism from the US Securities and Exchange Commission (SEC) of applications for spot Bitcoin exchange-traded funds has caused the price of BTC to drop from over $31,000 to $29,800.
While Bitcoin is currently trading above the $30,000 line, there is uncertainty surrounding ETF filings by BlackRock and other major financial players, which could lead to another downtrend and a test of lower support.
If this were to happen, Bitcoin bulls should hold the $29,500 line, which is the next support below $30,000. Additionally, Bitcoin’s 50-day moving average (MA) on the daily chart could provide strong support for the cryptocurrency, which currently stands at $28,100.
Related Reading: Ethereum Classic (ETC) Resumes Uptrend, Notches 13% on Last Day
Nevertheless, as reported on June 29 by NewsBTC, Bitcoin is likely to enter a 10-day period of downtrend due to losing the strength of the current uptrend, as noted by the Average Directional Index (ADX) on the 1-day chart .
The ADX is a technical indicator that measures the strength of a trend and is used by traders to identify potential price movements. Bitcoin’s ADX is already falling, suggesting a possible trend shift. In addition, the squeeze momentum indicator also reflects the downtrend that Bitcoin could experience over the next week and a half.
Overall, the US SEC’s recent criticism of BlackRock and Fidelity’s filings for spot BTC ETFs adds to uncertainty about the cryptocurrency’s future price movements.
If the asset managers cannot come to terms with the SEC’s expectations, their ETF applications could be in jeopardy.
Featured image of Unsplash, chart from TradingView.com