SEC  raises questions as Cboe halts global X Bitcoin ETF listing

In a recent development in the world of cryptocurrency investment, the Cboe BZX Exchange has decided to withdraw its application for the listing and trading of shares belonging to the Global X Bitcoin Trust. 

This decision comes after the United States Securities and Exchange Commission (SEC) failed to approve the proposed rule change that would have allowed the exchange to list shares of the Global X Bitcoin Trust’s exchange-traded fund (ETF). 

The news comes as the SEC had recently given its approval for the listing of spot Bitcoin ETFs on U.S. exchanges, marking a significant milestone in the cryptocurrency investment landscape.

Cboe BZX exchange withdrawal of application

The Cboe BZX Exchange had initially filed its application to list and trade shares of the Global X Bitcoin Trust in August of 2023. However, despite two extensions granted by the SEC in September and November, the exchange received official confirmation that its proposal was withdrawn. This withdrawal effectively puts an end to the prospects of Global X’s spot Bitcoin ETF being listed on the Cboe exchange.

Background on Spot Bitcoin ETFs

The decision to withdraw the application comes in the wake of the SEC’s groundbreaking approval of spot Bitcoin ETFs for the first time. This move by the regulatory body marked a significant shift in its approach to cryptocurrency investment products, opening the door for investors to gain exposure to the world’s leading cryptocurrency through regulated ETFs. The approval was met with enthusiasm by the cryptocurrency community and investment industry alike.

Future speculations

With the approval of spot Bitcoin ETFs, there is now speculation within the market that the SEC may soon approve spot Ether (ETH) exchange-traded products. This could potentially pave the way for investors to access Ethereum, the second-largest cryptocurrency by market capitalization, through similar investment vehicles. 

The SEC has already extended deadlines for offerings from major asset managers such as BlackRock and Grayscale, with final decisions expected to be made in May of this year.

Market impact

Despite concerns surrounding the potential impact of spot Bitcoin ETFs on existing investment products, data shows that there has been a mixed response from investors. As of January 26th, 2024, there were approximately $5 billion in outflows from the Grayscale Bitcoin Trust following its conversion into an ETF. 

However, in contrast, there were notable net inflows of $759 million across all the spot Bitcoin ETFs that received SEC approval on January 10th, 2024. This indicates a diverse range of investor sentiments and strategies in response to the evolving cryptocurrency investment landscape.