There are reports that the US Securities and Exchange Commission rejected one or perhaps two recent applications for Bitcoin Exchange Traded Funds (ETFs), indicating that the regulator is not quite ready for its more exotic futures products yet.

Roughly a day after Valkyrie filed for a bitcoin futures ETF and Direxion applied for a reverse bear fund, the SEC appears to have vetoed both.

On Thursday, Eric Balchonas, chief analyst at Bloomberg, quoted a Dow Jones warning that the leveraged Valkyrie fund has been suspended by the Securities and Exchange Commission. He added that the move would likely also apply to an application for reverse financing.

ETF issuer Direxion applied for a Bear Strategy Bear ETF on Tuesday, which will allow speculators to buy short BTC futures contracts. On the same day, Valkyrie applied for a BTC futures ETF that would provide 1.25 times the exposure of the asset.

The Direxion product will be invested exclusively in futures contracts; However, Valkyrie wanted futures contracts, swaps, options, and futures contracts. In another warning, the Dow reported that the US Securities and Exchange Commission appears to be interested only in direct futures products, the funds that buy contracts on the Chicago Mercantile Exchange (CME).

At this point, the regulator does not appear to be interested in approving any products that invest in the asset itself, or anything other than CME futures contracts. Balchunas emphasized:

“It would be interesting (and possible) if they missed the Inversion. This was limited to futures.” Valkyrie is “a little different from this language.”
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Nate Geracci, president of the ETF Store, said two other ETFs were deposited on Wednesday by AXS Investments. Introducing a dedicated SEC for the Bitcoin Strategic ETF, similar to the two already approved funds, as well as another short or inverse fund.

Another Dow Jones report says Grayscale is confident that the SEC will be ready to approve a Bitcoin spot ETF by July 2022.

On October 19, Grayscale applied to the SEC to convert the popular Bitcoin Trust (GBTC) into a spot fund backed by the same asset instead of a futures contract.

Geraci commented on the current lack of regulation in the crypto spot markets: “So will crypto markets/exchanges be regulated? Seems ambitious. ”

In the news, VanEck has completed preparations for the launch of the Bitcoin Strategy ETF, which will trade under the XBTF ticker. Balchunas said on Wednesday that there is a “good chance” that trading will start on Friday 29 October, but perhaps Thursday.

Source: CoinTelegraph