Why the SEC Is Likely to Deny BlackRock, Global X, and Others’ Spot Bitcoin ETF Proposals

The SEC recently outlined concerns over potential Bitcoin price manipulation and fraud as reasons for delaying approval of Global X’s spot BTC ETF application. According to analyst WhaleWire, this likely foreshadows rejections for other pending spot Bitcoin ETFs like BlackRock’s.

SEC Details Manipulation Concerns

In its filing delaying a decision on Global X’s spot Bitcoin ETF until January 2024, the SEC requested further feedback on concerns like susceptibility to manipulation and adequate transparency.

WhaleWire highlighted questions around whether the proposed ETF and shares would be vulnerable to manipulation. The SEC also wants views on if the proposal sufficiently prevents fraudulent acts, citing the need for surveillance-sharing agreements.

WhaleWire notes such concerns over potential manipulation formed the core rationale behind rejecting previous spot Bitcoin ETF applications over the years. With the same issues still unresolved, WhaleWire expects the SEC will deny Global X’s proposal in January 2024.

Implications for Other Applicants

Commenter Svetoslav Grigorov suggested manipulation concerns won’t affect BlackRock’s spot ETF bid. However, WhaleWire contends the same Bitcoin market issues apply across all applications.

Without addressing transparency and manipulation problems, WhaleWire believes BlackRock and other applicants will face rejections like Global X. The SEC wants strict mechanisms to prevent fraud and manipulation.

Uphill Battle Remains

While applicant arguments around Bitcoin’s resistance to manipulation have developed, the SEC still has significant doubts. Surveillance-sharing agreements with regulated Bitcoin markets are lacking.

Unless these core concerns are satisfied, WhaleWire thinks the SEC will continue denying spot Bitcoin ETFs as they have historically. With the same rationale weighing against BlackRock, approval remains an uphill battle.

Read also:

The SEC’s detailed questions suggest they will take a meticulous approach evaluating the latest crop of spot ETF applicants. While futures-based products exist, direct Bitcoin exposure via an ETF remains elusive for now. The coming years will determine if market changes can appease the SEC’s worries.

We recommend eToro

74% of retail CFD accounts lose money.
Active user community and social features like news feeds, chats for specific coins available for trading.
Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs.
Copy trading: allows users to copy thetrades of leading traders, for free.
User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate.
eToro offers staking for certain popular cryptocurrencies like ETH, ADA, XTZ etc.
intelligent crypto
How are  regular people making returns of as much as 70% in a year with no risk?  By properly setting up a FREE Pionex grid bot - click the button to learn more.
Crypto arbitrage still works like a charm, if you do it right! Check out Alphador, leading crypto arbitrage bot to learn the best way of doing it.

CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com


Temitope Olatunji
Temitope Olatunji

Temitope is a seasoned writer with over four years of experience. He specializes in Web3 and FinTech topics and enjoys creating content in these areas. He holds both a bachelor's and master's degree in Linguistics. When not writing, he trades forex and plays video games.