Global X Withdraws Application for Spot Bitcoin ETF
ETF provider Global X has officially withdrawn its application for a spot Bitcoin ETF, according to a recent SEC filing. The withdrawal notice was submitted by the CBOE BZX Exchange on behalf of Global X Bitcoin Trust. This comes after the SEC approved 11 other spot Bitcoin ETFs in the past two weeks.
Challenges Faced by Global X and Other Applicants
The approval process for these 11 funds was difficult, as the SEC had concerns about market manipulation, lack of surveillance-sharing agreements, and fraud monitoring in Bitcoin spot markets. Global X faced initial resistance from the SEC when it first attempted to launch a spot Bitcoin ETF in 2021, and further delays occurred when it refiled in August 2023 due to documentation issues. Pando Asset Management and 7RCC are also waiting for approval for their spot Bitcoin ETFs.
GBTC Outflows Decrease as New ETFs Emerge
Authorized ETFs such as Bitwise, Grayscale, and BlackRock experienced significant outflows since their launch, which had an impact on Bitcoin’s price due to selling pressure. These outflows were primarily caused by factors like forced selling related to the FTX estate and profitable investor strategies tied to GBTC’s discount over the past two years. However, Bloomberg analyst James Seyffart noted that the daily outflows from GBTC fell to $191.7 million on Monday. The outflows have been partly offset by investments flowing into the recently launched spot ETFs.
Global X’s Withdrawal Not Surprising
Seyffart stated that Global X’s withdrawal from the race for a spot Bitcoin ETF was expected since they were no longer in contention since early December. He tweeted about the official withdrawal request from Global X ETFs, confirming their exit from the race.
The Significance of Spot Bitcoin ETFs
A spot Bitcoin ETF allows investors to track Bitcoin’s price movements without owning the cryptocurrency directly. The ETF holds the Bitcoin on behalf of investors. According to Mathew McDermott, head of digital assets at Goldman Sachs, investing in Bitcoin through these ETFs is a more cost-efficient option compared to direct ownership of the crypto. Goldman Sachs has a positive view of the market impact of spot Bitcoin ETF approvals.
Hot Take: Global X Exits the Spot Bitcoin ETF Approval Race
Global X’s withdrawal from the spot Bitcoin ETF approval race marks another setback for the cryptocurrency industry. While 11 other funds received SEC approval, Global X faced challenges and delays throughout the process. The emergence of spot Bitcoin ETFs provides investors with a convenient and cost-effective way to gain exposure to Bitcoin’s price movements. However, GBTC outflows have affected market dynamics, although recent data suggests a slowdown in outflows. Despite Global X’s exit, other applicants are still waiting for approval, indicating that the race for a spot Bitcoin ETF is far from over.
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