SEC gives a nay to Fidelity spot Bitcoin ETF amid ongoing BTC market decline

bitcoin BTC ETF spot
image from medium.com

Key Takeaways:

  • The U.S. Securities and Exchange Commission (SEC) denies another spot Bitcoin exchange traded fund (ETF).
  • Bitcoin consolidated above $36,000, holding key support.

YEREVAN (CoinChapter.com) – The U.S. Securities and Exchange Commission (SEC) has denied another spot Bitcoin exchange-traded fund (ETF); this time from Fidelity, a Boston-based financial services company.

SEC’s denial to approve Fidelity’s “Wise Origin Bitcoin Trust” comes days after the agency threw out other spot ETF applications. First Trust, an investment advisory firm, and hedge fund SkyBridge Capital also attempted to sway the U.S. securities regulator.

It is essential for an exchange listing a derivative securities product to enter into a surveillance-sharing agreement with markets trading the underlying assets for the listing exchange to have the ability to obtain information necessary to detect, investigate, and deter fraud and market manipulation, as well as violations of Exchange rules and applicable federal securities laws and rules.

read the SEC ruling.
Also read: Bitcoin to dive lower in the wake of the FOMC meeting, says analyst.

Claire Putzeys, the communications director at Fidelity Investments, also commented on the unsurprising denial. He stated that the company was “disappointed” but hopeful.

While we are disappointed by the outcome of the SEC’s deliberations resulting in today’s disapproval order, we reaffirm our belief in market readiness for a physical bitcoin exchange traded product and look forward to continued constructive dialogue with the SEC.

commented Mr. Putzeys.

Bitcoin spot ETF vs. futures ETF

In detail, the SEC approved ProShares’ first US Bitcoin futures ETF in late Oct 2021. However, the latter has not yet approved a single spot ETF, unlike its counterpart in Canada that had approved Fidelity’s spot crypto ETF in Dec. 2021. The agency’s reluctance to greenlight spot ETFs might stem from the difference between the two.

In a futures ETF, clients buy or sell a contract that represents the value of a specific cryptocurrency. They don’t actually own the currency, which reduces the risks of dealing with the volatile cryptocurrency market.

Also read: US Federal Reserve to end Quantitative Easing (QE) in March. Bitcoin (BTC) tanks. 

On the other hand, a spot ETF offers immediate trading, where the client buys the coins they trade. According to the SEC, spot trading exposes investors to greater risk. The agency claims the denial is “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.” 

Meanwhile, Bitcoin (BTC) traded at $36,580 in the European session on Jan 28.

Bitcoin (BTC) chart. Source: CoinMArketCap.com
Bitcoin (BTC) chart. Source: CoinMarketCap.com

Bitcoin charts indecisive

The alpha crypto held critical support of over $34,000. As CoinChapter reported earlier, the digital asset could meet rejection at $37,500 – $38,000. However, the price action did not look ready for a convincing rebound, as it still consolidated after forming a local high at over $38,500.

Also read: Tesla’s Bitcoin profits risk evaporating as BTC eyes run-down towards $30K. 
Bitcoin (BTC) could comply with the sell-off pressure. Source: BTCUSD on TradingView.com
Bitcoin (BTC) could comply with the sell-off pressure. Source: BTCUSD on TradingView.com

Moreover, if Bitcoin manages an uptrend, it could retest the resistance trendline that has been instrumental since mid-November. Additionally, the relative strength index (RSI; purple graph) recovered from the oversold territory and charted at 30, the lowest margin of a ‘normal’ range.

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Bitcoin ETF, SEC gives a nay to Fidelity spot Bitcoin ETF amid ongoing BTC market decline

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