Bitcoin Holds Ground After ETF Rejections

Bitcoin remained steadfast this week holding its value as the ETF rejection storm continued tugging on its roots. The U.S. Securities and Exchange Commission (SEC) on Wednesday this week, rejected applications for nine bitcoin-based exchange-traded funds (ETF) from three separate companies.

The companies included Direxion, GraniteShares and ProShare, which submitted five, two and two proposals respectively. Sadly, all were rejected.

Below are final rulings of the SEC on the rejected proposal of the company GraniteShares. The rest of the rejections followed the same pattern.

On January 5, 2018, GraniteShares filed a proposal to SEC for a rule change to list and trade the shares of the GraniteShares Bitcoin ETF and the GraniteShares Short Bitcoin ETF. The exchange argued in their statement that  “policy concerns related to an underlying reference asset and its susceptibility to manipulation are mitigated as it relates to bitcoin because the very nature of the bitcoin ecosystem makes manipulation of bitcoin difficult.” This was done in order to make the case that the crypto trading was a secure passage and is not susceptible to fraud.

The criteria for judgement to approve or reject the proposal was that if the rules of the national securities exchange were designed “to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.”

The SEC Council rejected the proposal(s) while making the following remarks:

1. The Exchange has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act explained above.
2. The Exchange has failed to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient.
3. The Exchange has not demonstrated that the structure of the spot market for bitcoin is uniquely resistant to manipulation.
4. There is insufficient evidence to determine that the bitcoin futures markets are markets of significant size.

On a positive note, the SEC ruled that the problem lies not with the existence of bitcoin or its network, but with the policies of the concerned exchanges.

In the conclusion, the SEC rejected all nine of the proposals.


Let us now move to the real discussion for tonight, how is bitcoin reacting to this dishevelled news? The answer, surprisingly well. In the last week bitcoin has been relatively stable, holding its ground with an average of $6,500. What’s more, bitcoin hit the week highest, $6,809 on the 22nd of August — the day of the rejection of the ETF proposals.

Source: CoinDesk

It’s almost like investors have started caring less about the ETF gigs in the court, carrying on with the trading oblivious of the battlegrounds that are being entrenched in the SEC.

In the previous episode, this July, the SEC rejected the Winklevoss’ petition which claimed that crypto markets are “uniquely resistant to manipulation.” In their rejection of the petition, SEC said that “the record before the Commission does not support such a conclusion.”

Crypto analysts, though angered at the SEC rulings, find it justified and are hopeful for an ETF approval in the future.

As of today, the SEC says that it will “review” Wednesday’s rejection orders for 9 bitcoin ETFs. Pending the outcome of the review, the three August 22 orders have been stayed. A genuine reconsideration or a shadowy attempt to manipulate the market?

Sarim Mehmood

An electrical engineer to be. Sarim is a blockchain & crypto enthusiast and an early investor in ETH and Ethereum based projects. Contact the editor at

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