SEC Rejects VanEck’s Spot Bitcoin ETF Proposal

The U.S. Securities and Exchange Commission (SEC) rejected investment firm VanEck’s proposal for a spot bitcoin exchange-traded fund (ETF) in a decision released on Friday. The agency had previously delayed its final decision on the proposal in September.

• In its letter, the SEC wrote that “the Commission concludes that [the fund] 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 requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and to ‘protect investors and the public interest.’”

• The decision was widely expected as SEC Chair Gary Gensler has indicated his preference for a bitcoin futures ETF over an ETF that holds bitcoin multiple times in the past.

• Two bitcoin futures ETFs, the ProShares Bitcoin Strategy ETF (BITO) and the Valkyrie Bitcoin Strategy ETF (BTF), began trading last month, leading to a significant rally in the price of bitcoin. VanEck has its own bitcoin futures ETF that has received permission from the SEC to launch, but it has not begun trading yet.

• The price of bitcoin briefly dipped less than 1% following the release of the SEC’s decision, but quickly recovered. Bitcoin was trading down about 3.1% over the past 24 hours to $63,182.

This is a developing story and will be updated.

UPDATE (Nov. 12, 17:10 UTC): Added BTC price information.

UPDATE (Nov. 12, 17:29 UTC): Added SEC statements in first bullet point.