The SEC says this Bitcoin ETF should be abandoned

The US Securities and Exchange Commission (SEC) has ordered First Trust Advisors and Skybridge Capital to announce the termination of their Bitcoin exchange-traded fund (ETF) application.

The FirstTrust-SkyBridge Bitcoin ETF was one of the first to be rejected by the SEC after it approved futures-based Bitcoin products.

Analysts were puzzled by SkyBridge's refusal.

The SEC directive came after First Trust and SkyBridge failed to respond in time to the commission's communications. It stated that the agency order informed the applicants that the applicant should be deemed abandoned after nine months.

First Trust Advisors and Skybridge Capital initially filed suit in March 2021, with the SEC's initial rejection coming nearly a decade later.

Bloomberg ETF analyst Eric Balchunas and ETF Warehouse CEO Nate Geraci expressed confusion over the firms' decision not to resubmit. The reluctance is puzzling, especially given Bitcoin's high value of around $72,000. Record entry into Bitcoin ETFs also shows the growing investor interest in the cryptocurrency as a legitimate asset class.

“IMO, he could have charged a significant premium to the market and still had vacant properties. Only on the FT distribution machine (comes fully with file and taxi and attracts the perfect audience for spot btc ETFs),” said Gerasi.

Read more: How to trade Bitcoin ETF: A step-by-step approach

Due to market volatility, investor protection and regulatory concerns, the SEC has rejected applications from Arc Invest and others for a Bitcoin ETF. At least seven applicants, including BlackRock and Cboe, have entered into intelligence-sharing agreements with Coinbase to avoid market manipulation concerns.

The SEC has approved BlackRock's iShares Bitcoin Strategy ETF (IBIT) after the company made the necessary changes. This creates a pattern of future indicators that the First Trust SkyBridge ETF can follow.

While approval is not guaranteed to follow BlackRock, it could allow the companies to increase revenue in the current bull market.