The SEC’s Firm Stance

Reports are coming in hot, saying that the U.S. Securities and Exchange Commission (SEC) has sent two recent Bitcoin exchange-traded fund (ETF) applications straight to the rejection pile. While this might sound like a typical Tuesday for the regulator, it actually signals a notable hesitation toward more exotic futures trading products.

Valkyrie and Direxion: Attempting to Get Leverage

On a brisk Tuesday, Valkyrie waltzed in with an application for a leveraged Bitcoin futures ETF, just as Direxion followed suit with plans for an inverse fund aimed at the bearish crowd. Just a day later, it seems both of them might want to pick up knitting instead, as the SEC has thrown a wrench in their plans. Bloomberg’s ETF analyst, Eric Balchunas, shared the news through a Dow Jones alert: it looks like the Valkyrie fund has been shelved, and the inverse counterpart might be on the same track.

What’s on the SEC’s Menu?

It seems the SEC is only interested in straightforward, direct futures products for the time being. They want funds that buy contracts straight from the Chicago Mercantile Exchange (CME) and nothing too fancy beyond that. Balchunas remarked that while an inverse fund could have been an interesting contender, the Valkyrie application seemed to stray from the SEC’s current language of regulations.

More ETFs on the Horizon?

Just when you think it can’t get any busier in the ETF world, on Wednesday, AXS Investments threw their hat in the ring with yet another two ETF applications. One seeks to mirror the already approved Bitcoin Strategy ETFs, while the other aims to tap into the short-sell strategy by betting against Bitcoin prices. No one can accuse these guys of not being ambitious, can they?

The Future of Spot Bitcoin ETFs

After watching all the back-and-forth, it’s refreshing to note that Grayscale is feeling confident about securing a spot Bitcoin ETF approval by July 2022. In an interesting twist, they have submitted an application to convert their well-known Bitcoin Trust (GBTC) into a spot fund, which would be backed directly by the asset itself rather than futures. Whether this will light a fire under the SEC remains to be seen.

VanEck’s Big Step Forward

In a related note, VanEck is on the brink of launching its own Bitcoin Strategy ETF, ready to trade under the ticker XBTF. There’s chatter that it could start trading as early as October 29, and investors are sitting tight, perhaps hoping it won’t meet the same fate as its peers. Will investors finally get a break from the seemingly incessant regulatory snags? Only time will tell!