After the Wall Street Journal reported the SEC rejection on Friday, bitcoin, which had risen since BlackRock filed its application on June 15, plummeted. The largest cryptocurrency fell 1% to $30.142.
Fidelity, BlackRock, Nasdaq, and Cboe declined to comment on the report.
The ETF filings by such significant corporations reignited investor hopes that a bitcoin ETF would be approved by the SEC and restored interest in cryptocurrencies, which have been hammered by a series of crypto company meltdowns, notably the abrupt collapse of exchange FTX late last year.
In January 2022, the SEC denied Fidelity’s spot Bitcoin ETF application.
According to a source, recent asset management applications to create spot bitcoin exchange-traded funds (ETFs) were not transparent and complete.
The source noted on Friday that the SEC had communicated its concerns to Nasdaq (NDAQ.O) and Cboe Global Markets (CBOE.Z), who filed the applications on behalf of asset managers like BlackRock (BLK.N) and Fidelity.
In all cases, it said the filings did not fulfill standards to avoid fraud and manipulation and safeguard investors and the public interest.
BlackRock and Fidelity’s submissions recommended a surveillance mechanism to prevent manipulation but did not specify which Bitcoin exchange would be engaged.
Coinbase (COIN.O), Riot Platforms (RIOT.O), and Marathon Digital (MARA.O) declined between 3% and 3.7% after the SEC’s decision.
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