The U.S. Securities and Exchange Commission (SEC) has applied for a Bitcoin exchange-traded fund (ETF) from First Trust Advisors and SkyBridge Capital, led by former White House communications director Anthony Scaramucci. Ordered that it be declared abandoned.
The regulatory guidance, released Wednesday, highlights the procedural implications of the First Trust SkyBridge Bitcoin ETF’s lack of response to the SEC’s prior communications.
ETF Application Update: Notice for First Trust and SkyBridge to Abandon Registration
SEC Instructions first trusted advisor and Skybridge Capital Declaring the Bitcoin ETF application abandoned highlights the regulatory hurdles facing cryptocurrency-focused financial products.
Despite first applying for a Bitcoin ETF in March 2021, that application faced rejection in January 2022, matching the fate of numerous other similar proposals. Interestingly, both companies decided not to resubmit their applications after the SEC approved BlackRock’s Bitcoin ETF, even after revising their submissions to take regulatory feedback into account.
You will never understand this move…
IMO they could have charged a fairly significant premium to the market and still have had assets empty.
— Nate Geraci (@NateGeraci) March 13, 2024
The strategic decisions of First Trust and SkyBridge are questioned.
Eric Balchunas, an ETF analyst at Bloomberg, expressed skepticism about the basis for First Trust and SkyBridge’s decision not to resubmit their applications after approval. BlackRock ETF.
In a post to X, Balchunas highlighted that First Trust missed an opportunity to capitalize on the momentum following BlackRock’s success. Industry observers have speculated about the potential impact of First Trust’s successful launch, highlighting the company’s sales and distribution capabilities.
Market Dynamics: Bitcoin ETF Options Awaiting Approval
With the price of Bitcoin hovering around $72,000, surging more than 50% over the past month, market observers are eagerly anticipating the introduction of spot Bitcoin ETF options trading. The SEC’s recent decision to delay approving options trading for Bitcoin ETFs filed by Cboe Exchange and the Miami International Securities Exchange has raised expectations among analysts and industry stakeholders.
Outlook for Leveraged Bitcoin ETFs: SEC Review Underway
In addition to spot Bitcoin ETFs, the SEC is also evaluating proposals for various leveraged Bitcoin ETFs, indicating continued interest in expanding cryptocurrency investment products. Filings from asset managers like Direxion, ProShares, and REX Shares for a leveraged BTC ETF highlight the evolving landscape of cryptocurrency investment products.
As cryptocurrency markets develop and regulatory frameworks mature, the emergence of a Bitcoin ETF liquidity crisis becomes more likely, presenting challenges and opportunities for investors and market participants alike.