SEC rejects nine bitcoin-backed ETF proposals from ProShares, Direxion, and GraniteShares, weeks after rejecting a proposal from the Winklevoss twins
Context & Ripple Effects
This is the second wave of a two-part rejection: weeks after turning down the Winklevoss twins' Bitcoin Trust on BATS in March 2017, the SEC now blocks nine more bitcoin-backed proposals from ProShares, Direxion, and GraniteShares — extending the same objection from one applicant to an entire filing class.
The story does not end at disapproval: within a day the SEC agreed to review its own orders, keeping the proposals alive, and the arc that follows runs through the 2021 green light for ProShares' and Invesco's futures ETFs to the January 2024 approval of spot bitcoin ETFs from BlackRock, Grayscale, Fidelity, and eight others.
First-order effects
- ProShares, Direxion, and GraniteShares cannot list their nine funds, leaving US retail investors without any exchange-traded bitcoin vehicle despite multiple filed attempts across two years.
Second-order effects
- The SEC's immediate decision to review and stay its own disapproval orders signals internal disagreement over the rejections, giving the three issuers a procedural path to resubmission rather than forcing them to abandon the products.
Third-order effects
- If the pattern holds, the commission's gatekeeping pushes issuers toward structures it deems acceptable first — the futures-based route ProShares eventually won in 2021 — before broader approval arrives with the 2024 spot ETF decisions for BlackRock, Grayscale, ARK 21Shares, Bitwise, WisdomTree, Fidelity, VanEck, Invesco, Valkyrie, Hashdex, and Franklin.
The trend: Bitcoin ETF access in the US is being metered by the SEC product-structure-by-product-structure, moving from blanket rejection in 2017-2018 to futures approval in 2021 to spot approval in 2024.