SEC to Review Decision Disapproving Nine Bitcoin ETFs

There is a slight possibility that the US Securities and Exchange Commission (SEC) might reverse its decision to reject nine Bitcoin-related exchange-traded funds (ETFs). SEC secretary Brent Fields said in a letter to the New York Stock Exchange (NYSE) that the commission chairman and commissioners would review the action delegated to its staff, but that until then the current decision is valid.

“This letter is to notify you that, pursuant to Rule 431 of the Commission's Rules of Practice, 17 CFR 201.431, the Commission will review the delegated action. In accordance with Rule 431 (e), the August 22 order is stayed until the Commission orders otherwise,” the letter reads. “The Office of the Secretary will notify you of any pertinent action taken by the Commission,” it adds.

A similar letter was sent to Chicago-based exchange operator CBOE, which was ready to list two of the nine Bitcoin ETFs along with NYSE.

The letter comes after the NYSE Arca saw the proposal for nine Bitcoin ETFs rejected by the SEC on Wednesday. The ETFs, including some leveraged ETFs, were developed by ProShares, Direxion Asset Management, and GraniteShares. Five of the rejected funds come from Direxion and are meant to give investors the opportunity to go long and short on the Bitcoin price. ProShares and GraniteShares came with two Bitcoin-related funds each.

After the SEC’s disapproval, Bitcoin started a bearish trend, losing about 4% in less than a day.

Chris Matta, co-founder of Crescent Crypto Asset Management, told Bloomberg that we wouldn’t see those ETFs approved by the SEC anytime soon.

“The markets are small and the volumes on some of these exchanges are low, which makes it such that manipulation is possible,” Matta said.

The SEC commissioners voted 3-1 on Wednesday to reject the nine applications, with Republican commissioner Hester Peirce being the only one to favor those.

In her Twitter profile, Peirce explained the decision for the pending review.

https://twitter.com/HesterPeirce/status/1032735262181351424

Bitcoin is currently moving in a slight uptrend, gaining 1.5% for the last 24 hours.