The Long and Winding Road: A Historical Overview of Bitcoin ETF Applications
Introduction
The advent of Bitcoin and its subsequent growth have led to a tug-of-war between financial regulators and cryptocurrency enthusiasts. One of the most significant battlegrounds has been the application for Bitcoin Exchange-Traded Funds (ETFs). This article aims to trace the evolution of Bitcoin ETF applications and their fates through the years.
2013: The First Attempt – The ProShares Bitcoin Trust
The journey began in 2013 when ProShares, a leading provider of exchange-traded funds, filed with the U.S. Securities and Exchange Commission (SEC) for a Bitcoin-based ETF. The SEC, however, rejected the proposal, citing concerns about the lack of transparency, market manipulation, and price volatility in the Bitcoin market.
2015: Second Time Lucky – Winklevoss Bitcoin Trust (COIN)
In July 2013, the Winklevoss twins, famous for their involvement in the early days of Facebook, joined the race with their Winklevoss Bitcoin Trust. The trust aimed to provide shareholders with the value equivalent to the price of the digital currency. Despite reassurances about compliance with regulatory requirements, the SEC denied the application in March 2017, citing concerns about market manipulation and surveillance-sharing agreements.
2017: Multiple Applications and Failed Attempts
The year 2017 saw a flurry of applications for Bitcoin ETFs. SolidX, in collaboration with thestockmarket.com, Typhoon Capital, and the Ontario Teachers’ Pension Plan, filed an application in June. Less than two months later, NYSE Arca and CBOE BZX Exchange, in partnership with SEC-registered investment advisor ProShares, also filed for a Bitcoin ETF. All these applications met the same fate: rejection by the SEC, with concerns about the fraudulent and manipulative acts and practices in the digital asset market.
2018-2021: Continuous Applications and Hopes
In 2018, VanEck and SolidX, with backing from the CBOE BZX Exchange, filed another application for a Bitcoin ETF. The SEC once again delayed a decision, citing the need for more time to consider the complex issues involved. In 2019, Bitwise Asset Management dropped their application, stating market manipulation was less prevalent than previously thought, but the SEC rejected it nonetheless.
In 2021, several applications have been filed, including one by Grayscale, the largest digital currency asset manager. As of now, the SEC is yet to make a decision.
Conclusion
The journey of Bitcoin ETF applications has been long and arduous, with repeated rejections from the SEC. However, each application has served to propel the cryptocurrency market closer to mainstream acceptance. As regulators continue to grapple with the complexities of cryptocurrencies, the future of Bitcoin ETFs remains uncertain, but the road to approval is still under construction.