First Trust-SkyBridge's Bitcoin ETF Application Left in Limbo as SEC Declares Abandonment

On Mar 13, 2024

The US Securities and Exchange Commission (SEC) has ordered First Trust Advisors and SkyBridge Captial to declare its Bitcoin ETF application abandoned.

First Trust’s BTC ETF Application

In a recent development, the Securities and Exchange Commission (SEC) declared the abandonment of the spot Bitcoin ETF application jointly filed by First Trust-SkyBridge, a hedge fund run by Trump-era White House Communications Director and digital assets investor Anthony Scaramucci.

According to the SEC’s filings, it had jointly filed a registration statement to register securities under Section 6(a) of the Securities Act of 1933. The registration statement has been on record for over nine months but has not yet become effective.

Senior Bloomberg ETF analyst Eric Balchunas reported that the SEC’s decision stemmed from the applicants’ failure to respond to prior communications from the Commission, as outlined in Rule 479 of the Securities Act of 1933.

History of the Application

First Trust and SkyBridge submitted their application for a Bitcoin ETF in March 2021. However, like many others, their initial attempt was rejected by the regulatory agency in January 2022. Despite spending nine months under SEC review, the application had not gained approval before the recent announcement.

The SEC notified First Trust SkyBridge about the potential abandonment of their registration statement if no action was taken to amend or withdraw it. Despite this warning, the firms did not reapply, even after the approval of BlackRock’s Bitcoin ETF, one of the first to receive SEC approval. Consequently, the SEC issued the order to abandon the registration statement on March 12, 2024.

Impact of BlackRock’s ETF

ETF expert Balchunas expressed uncertainty regarding First Trust and SkyBridge’s decision not to re-file after BlackRock’s successful application. Notably, since the approval of multiple spot Bitcoin ETFs in January 2024, there has been a significant weekly net inflow, reaching $2.23 billion.

BlackRock’s Bitcoin ETF (IBIT) and Fidelity’s FBTC together attracted approximately $700 million in inflows on March 12. BlackRock’s IBIT alone surpassed MicroStrategy’s Bitcoin holdings, with a net inflow of $2.07 billion for the week. Among the various spot Bitcoin ETFs, BlackRock has maintained its leadership position in terms of both inflows and trading volume.

The increased attention on spot Bitcoin ETFs has coincided with a surge in the price of Bitcoin. The cryptocurrency recently reached a new all-time high (ATH) exceeding $72,000, reflecting growing investor interest and confidence in the market.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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