The Bitcoin ETF heat reignited as Valkyrie, a prominent crypto-asset management, announced on Wednesday it had updated and re-submitted its Bitcoin ETF application.
The investment firm has joined other financial giants, like Blackrock and Fidelity, in the race for a Bitcoin ETF. In its filing, Valkyrie included Coinbase as SSA counterparty, a similar move as Blackrock’s.
In December 2021, the U.S. Securities and Exchanges Commission (SEC) rejected Valkyrie’s Spot Bitcoin ETF filing since it didn’t meet the requirements.
At that time, the SEC added that approval for a Spot Bitcoin ETF was inappropriate, and they attempted to prevent fraudulent and market manipulation practices and to protect investors.
Wall Streets Stay Determined
On the other hand, the agency’s stance toward Futures Bitcoin ETF is more open. The SEC approved three Bitcoin futures ETFs in 2021, including ProShares Bitcoin Strategy ETF (BITO), The Valkyrie Bitcoin Strategy ETF (BTF), and VanEck’s Bitcoin.
A recent wave of filings gave Valkyrie a glimmer of hope for a second chance. Blackrock sent a big hit to the market after the giant announced its BTC ETF filing earlier in June. Following Blackrock, several major players in finance, such as BlackRock, Fidelity, WisdomTree, and Invesco, aligned under the same motivation.
However, in response to the heat, the SEC stated no applications had met the standards, as reported by Wall Street Journal. Shortly after the SEC’s reaction, those applicants updated and refiled their applications.
The agency has rejected all applications to launch a spot Bitcoin ETF. Many believe creating a market surveillance mechanism is the key to making existing ETF applications easier to pass. Triumph against the odds is never guaranteed, but it is not impossible.
Crypto insiders are optimistic that the SEC could accept BlackRock’s filing.
BlackRock CEO Larry Fink indicated his desire to collaborate with regulators and listen to any concerns that may arise regarding the asset manager’s recent Bitcoin ETF application. He also expressed his view that Bitcoin can be considered as “digitalizing gold.”
All The Big Players Are at The Table
In an interview with Fox Business, Larry Fink stated that they maintained a constructive relationship with regulators and expressed interest in receiving feedback. However, he refrained from elaborating further on BlackRock’s Bitcoin ETF application.
While discussing Bitcoin, Fink drew a comparison between the asset and digital gold, despite mentioning that he does not personally own any Bitcoin. “Let’s be clear: Bitcoin is an international asset.” He added, “It’s not based on any one currency, and so it can represent an asset that people can play as an alternative.”
The Role of Coinbase
Coinbase, in a significant move, has partnered with Nasdaq to bolster its market surveillance program through a bilateral surveillance sharing agreement. This collaboration can heighten the likelihood of Bitcoin ETF filings securing approval from the U.S. Securities and Exchange Commission (SEC).
Through the sharing of surveillance data, Coinbase aims to equip regulators, including the SEC, with supplementary tools and insights for monitoring and detecting potential market manipulation, fraud, and other illicit activities.
Coinbase, currently contending with an SEC lawsuit, faces allegations of operating as an unregistered securities exchange, with the SEC categorizing certain crypto assets on the platform as securities.
Responding to the SEC, Coinbase has filed a motion seeking the court’s dismissal of the SEC’s charges, arguing that the agency lacks jurisdiction over cryptocurrencies traded on its platform.
The awaited response from the SEC to Coinbase’s legal defense is anticipated on July 13th as the two entities navigate the legal landscape. The outcome of this legal battle will likely have implications for the regulatory environment surrounding cryptocurrencies and the prospects of Coinbase’s operations.