Spot Bitcoin ETF: Cboe Exchange Revokes Global X Application

The Cboe BZX Exchange has officially retracted its application for a rule change with the U.S. Securities and Exchange Commission (SEC). This move would have paved the way for listing Global X’s spot Bitcoin exchange-traded fund (ETF). Initially filed in August 2023, the application encountered multiple delays, with the SEC extending the review period in September and November. However, on January 26, Cboe BZX withdrew its proposal entirely.

SEC’s Mixed Signals on Spot Bitcoin ETFs

This withdrawal comes amidst a complex backdrop, marked by the SEC’s recent approval of spot Bitcoin ETFs on U.S. exchanges for the first time on January 10. Despite this progress, the regulatory landscape remains uncertain, as indicated by the SEC’s decision to postpone its verdict on Grayscale’s spot Ether ETF and other similar products from asset managers like BlackRock. These developments have sparked widespread speculation about the future of cryptocurrency ETFs in the U.S. market.

Moreover, the SEC’s hesitancy isn’t limited to Bitcoin-related products. The regulator has also delayed its decision on BlackRock’s proposed spot Ether ETF. The SEC, citing the necessity for an extended review period, pushed back its initial decision, showcasing a pattern of caution and thorough scrutiny in its approach to cryptocurrency ETFs.

These postponements align with the SEC’s broader strategy, often extending deadlines to ensure comprehensive evaluations of such novel financial products.

Market Reactions 

The market has responded to these regulatory developments with mixed reactions. Following the conversion of the Grayscale Bitcoin Trust to an ETF, there was a significant outflow of funds, amounting to approximately $5 billion.

Conversely, other spot Bitcoin ETFs, newly approved by the SEC, witnessed net inflows totaling $759 million. These contrasting trends highlight the market’s sensitivity to regulatory decisions and underscore the significance of the SEC’s stance on the future of cryptocurrency ETFs.

Industry experts remain cautiously optimistic as the crypto community anticipates the SEC’s final decisions on pending spot Ether ETF applications. While some, like Bloomberg ETF analyst Eric Balchunas, predict a high likelihood of approval by May, others, including Morgan Creek Capital’s CEO Mark Yusko, express more conservative estimates, reflecting the prevailing uncertainty in this emerging sector.

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