The U.S. Securities and Exchange Commission (SEC) rejected VanEck's spot Bitcoin exchange-traded fund (ETF) application on Friday, triggering a weekend of debate among cryptocurrency advocates. Veteran FX trader Peter Brandt told his 581,700 Twitter followers that Bitcoin maximalists should oppose spot ETFs. Preston Pysh, host of The Investor's Podcast, said Bitcoin ‘could care less’ about the decision.
SEC Cites Fraud Concerns, Community Reacts
The SEC's rejection letter stated that VanEck failed to demonstrate the product could adequately prevent ‘fraudulent and manipulative acts and practices.’ While the agency approved Bitcoin futures ETFs (such as the Proshares Strategy ETF) earlier this year, it remains cautious on spot products. SEC Chair Gary Gensler previously explained that futures ETFs fall under the Investment Company Act of 1940, while spot ETFs must meet stricter exchange requirements.
Peter Brandt: Preserve Bitcoin's Scarcity
‘Bitcoin maximalists should oppose spot Bitcoin ETFs in the U.S.,’ Brandt tweeted on Saturday. ‘Bitcoin's store of value story depends on its scarcity and even some difficulty to purchase. Let's not encourage greedy Wall Street to convert BTC into a vending machine asset. Say NO to ETFs.’ Brandt's view echoes concerns among Bitcoin purists that ETFs could dilute the asset's decentralized nature and introduce centralized custody risks.
Preston Pysh: SEC Protects Wall Street, Not Retail
Preston Pysh criticized the SEC for ‘benefiting hedge funds and Wall Street at the expense of retail investors.’ He questioned: ‘Gary Gensler, isn't this the opposite of what you're charted to do? We want answers. Your decisions are increasing distrust.’ Pysh also noted that Bitcoin is unaffected by ETF approvals: ‘It costs nearly nothing to custody and settles in 10 minutes. This thing literally feasts on corruption and manipulation — and boy is the plate full.’
Other Voices: Futures Easier to Manipulate?
Some argued that the SEC approved futures ETFs because they are easier to manipulate. Twitter user ‘Meme Sergeant Spliff’ wrote: ‘The SEC denied a spot ETF. Why? Because futures are easier to manipulate. The CFTC chair admitted they can tamp down silver prices via futures. Bitcoin and metals share anti-inflationary properties. They can tamp them down to make USD look safer.’ Despite the rejection, most traders observed no significant negative price impact, with many reiterating that Bitcoin does not need a spot ETF to thrive.