The much-awaited Bitcoin ETF application has been rejected by the Securities And Exchange Commission (SEC). In three orders published by the SEC 9 Bitcoin ETF proposals from ProShares, Direxion and GraniteShares were rejected.

The SEC rejected 9 proposals in total, 5 from Direxion, a pair from ProShares and two proposals from GraniteShares in three separate orders.

The comment by the agency on both the ProShares and Direxion application was similar:

“…the Commission is disapproving this proposed rule change because, as discussed below, the 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 the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”

Although the SEC has rejected several Bitcoin ETF proposals it does not imply anything about the underlying asset, the SEC notably said:

“[The agency] emphasizes that its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.”

One of the SEC commissioner Hester Pierce who was in favor of the Winklevoss ETF had said that it is not the SEC’s place to asses the underlying asset but to just make sure there is no fraud or manipulations going on in the marketplace and should be restricted to investor protection.

So from this, we can assume that the approval of a Bitcoin ETF is inevitable once these issues have been taken care of and there is an application which is compliant with all the rules.

How will it affect the price?

Before the announcement of the ETF approval, it was interesting to see the price of Bitcoin surge the day before which a lot of analysts are attributing to the Bitmex shutdown time. The charts looked very similar to a pump and dump and this goes to show that the concerns of the SEC are legit and that this industry still needs to mature. Its price shouldn’t depend on the operations of a single exchange.

Except for the mooners, a lot of influencers had predicted that there is a low chance of this ETF getting approved, the price of Bitcoin has just seen a decrease of about 4% which indicates that the bottom could be near (a tell-tale sign when a bad news does not cause a huge sell-off) or maybe we are just halfway through the bear market and there could be a huge sell-off if the next ETF application in September is rejected.

So What Next?

The next ETF to look for would be the VanEck SolidX Bitcoin trust which is scheduled for Sept 30th. Another one would be the Bitwise application whose first action is scheduled to Sept 7th and will most likely be pushed till next year February.

Some of the Bitcoin influencers like Andreas Antonopolous have said that a Bitcoin ETF is a bad thing and it is sad that the Crypto community is so dependent on its approval because the reason why Bitcoin was invented was to have ownership of your money and not institutionalize it.

Regardless of one agrees or disagrees with this perspective, it is true that by making it easy for people to invest in Cryptocurrencies like Bitcoin there will be more adoption and bring more liquidity which is needed if it is going to be a global reserve currency.

A lot of people are excited about the Bakkt which will be an institutionalized and transparent Bitcoin trading infrastructure, but the catch is that it will be fully collateralized and there will be no margin trading options.

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