SEC Orders First Trust and SkyBridge to Declare ETF Application as Abandoned

The US Securities and Exchange Commission (SEC) has instructed First Trust Advisors and SkyBridge Capital, the hedge fund led by former White House Communications Director Anthony Scaramucci, to mark their Bitcoin exchange-traded fund (ETF) application as abandoned. 

The regulatory notice, released on Wednesday, stated that the registration statement needed to be declared abandoned due to the lack of response from the First Trust SkyBridge Bitcoin ETF to prior communications from the SEC.

Initially, First Trust and SkyBridge filed for a Bitcoin ETF in March 2021. 

However, their application, like many others, was rejected in January 2022. 

Surprisingly, the firms did not re-apply following the approval of BlackRock’s bitcoin ETF by the SEC, even after making some revisions to their application.

First Trust and SkyBridge Did Not Re-File

Eric Balchunas, an ETF analyst at Bloomberg, expressed uncertainty about why First Trust and SkyBridge chose not to re-file their application after the success of BlackRock’s ETF. 

“FT was one of the filers who never jumped back in to the post-BLK race, not sure why,” he wrote in a post on X. 

“Had they launched prob add 15% to the flows prob as First Trust is a sales MACHINE.”

Agree. The more I pondered it today the more I had same thought. Wonder what happened

— Eric Balchunas (@EricBalchunas) March 13, 2024

In late January, ETF provider Global X also pulled its application for a spot Bitcoin ETF.

After facing resistance from the SEC in its initial attempt to launch a spot bitcoin ETF in 2021, Global X faced further delays upon refiling in Aug. 2023.

Global X missed the final list of potential ETFs due to documentation issues, but it’s not the only one that came up short. Pando Asset Management and 7RCC are also waiting for approval for their spot bitcoin ETFs.

Bitcoin’s price continues to hover around $72,000, up by more than 50% over the past month. 

The leading cryptocurrency has recently registered an all-time high of $72,953.

Market Awaits Bitcoin ETF Options

Last week, the US Securities and Exchange Commission (SEC) delayed the decision to approve options trading on spot Bitcoin ETFs.

The agency extended the response deadline for the Cboe Exchange and the Miami International Securities Exchange, both of which filed bids to offer options on Bitcoin ETFs. 

Analysts, such as VettaFi’s Dave Nadig, predict that the introduction of BTC ETF options will attract hedge fund players who were not previously involved in the crypto ecosystem, providing them with an opportunity to participate in the market.

Multiple leveraged Bitcoin ETFs are also under consideration by the SEC, including filings from asset manager Direxion for five inverse and long spot BTC ETFs, ProShares’ five leveraged Bitcoin funds, and REX Shares’ six leveraged ETFs.

It is worth noting that Bitcoin ETFs have experienced the most successful launch in the history of ETFs.

These products accumulated over 30,000 BTC in the previous week alone, currently holding close to $30 billion.

If this trend continues, it could create a new phenomenon where the demand for Bitcoin surpasses the available supply, effectively creating a Bitcoin ETF liquidity crisis. 

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