Wisdomtree Bitcoin ETF Rejection Catches No One by Surprise

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  • Wisdomtree’s latest Bitcoin ETF proposal has been rejected
  • The news will surprise no one, with market manipulation once again the cited reason
  • Wisdomtree’s Head of Digital Assets had already hinted that this was imminent

Another day, another Bitcoin ETF rejection. This time it’s the turn of New York-based exchange-traded fund and exchange-traded product sponsor and asset manager Wisdomtree, whose second bite at the cherry has ended in a similarly bitter taste. Once again investor protection, or the perceived lack of it, was the reason behind the decision not to allow it, which isn’t a surprise given that Wisdomtree’s own Head of Digital Assets warned recently that a Bitcoin ETF wouldn’t be granted until market manipulation was addressed.

Wisdomtree Bitcoin ETF Application Bears no Fruit

Wisdomtree first filed for a Bitcoin ETF in March 2021, an application that was delayed until the end of the year before being rejected. The company re-filed on January 25th this year, but with the same result – the proposal was rejected, with the Securities and Exchange Commission (SEC) ruling that because Wisdomtree had not demonstrated that its proposed ETF product was “designed to prevent fraudulent and manipulative acts and practices, the Commission must disapprove the proposal.”

This hardly comes as a surprise, given that all other Bitcoin ETF proposals to date have been met with a similar response. Indeed, Widomtree’s own Head of Digital Assets, Will Peck, warned less than two weeks ago that a Bitcoin ETF would not be forthcoming, saying that “market manipulation’s…the hardest nut to crack, where there’s been the biggest slowdown”, perhaps foreseeing where the SEC would be going with its ruling on their latest offering.

Grayscale Taking on the SEC

Not all rejected applications have taken the rulings lying down, however. Grayscale, which has pinned its entire future plans on converting its Bitcoin Trust into a Bitcoin ETF, launched legal proceedings against the SEC in June this year, arguing that the SEC was behaving “acting arbitrarily and capriciously”.

Peck said that Wisdomtree would not be supporting such action, but instead hoped to make headway with dialogue instead.