The SEC rejected nine applications for Bitcoin exchange-traded funds (ETFs) this week, but the price of the digital currency has remained steady despite the setback.
Bitcoin investors were let down this week after the SEC rejected nine applications for Bitcoin ETFs. ETFs are market-traded securities that track a basket of assets, similar to a mutual fund. Bitcoin investors had hoped that approvals for Bitcoin-centered ETFs would lead to an increase in the cryptocurrency’s value.
In a statement on the rejections, the SEC wrote that the applicants failed to prove that the cryptocurrency market was big enough to warrant an ETF. The statement suggests that the SEC is worried that the small cryptocurrency market is vulnerable to manipulation.
“That failure is critical because, as explained below, the Exchange has failed to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient, and therefore surveillance-sharing with a regulated market of significant size related to bitcoin is necessary,” the SEC wrote in a statement.
This isn’t the first time that the SEC has smacked down a cryptocurrency ETF. In July, the SEC rejected an ETF proposal from the Winklevoss twins, who have been in the cryptocurrency game since its earliest days. At one point, it was reported that the Winklevoss twins held $1 billion worth of Bitcoin.
The SEC announced this week that they will review their decision to reject the nine ETFs but it seems unlikely that they will reverse course. The price of the digital currency has remained relatively consistent over the past week despite the SEC’s rejection of the ETFs.
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