The Securities and Exchange Commission (SEC) has reportedly dismissed recent applications by various asset managers to launch spot Bitcoin (BTC) exchange-traded funds (ETFs). According to sources who shared information with The Wall Street Journal on Friday, the agency termed the applications as neither sufficiently clear nor comprehensive.

Specifically, the SEC commented about the applications filed by Nasdaq and Cboe Global Markets on behalf of the asset managers BlackRock and Fidelity, the sources familiar with the matter told the publication.

SEC Is Under Pressure

The number of asset managers seeking approval to list spot Bitcoin ETFs has increased recently despite the fact that the regulator declined similar applications in the past. According to the SEC, such funds are vulnerable to fraud and market manipulation.

The recent filings, especially by the Wall Street giants, renewed hopes among investors that the SEC might soften its stance and approve the first spot Bitcoin ETF in the US. Nonetheless, there has been a record amount of funds channelled to existing ETFs, including the ProShares Bitcoin Strategy ETF (BITO).

Finance Magnates reported that for the week that ended on June 25, BITO recorded the largest amount of investments worth $65.3 million. Additionally, on Friday of the same week, the fund traded 500 million shares, something that has only happened five times since it was launched. The data also showed a shift in investors’ behaviour where investments flowed from the Bitcoin cash market to the ETF market.

BlackRock Leads the Pack

The situation was triggered when BlackRock submitted an application for a spot Bitcoin ETF on June 16. In the application, the leading global asset manager noted that it will use the CME CF Bitcoin Reference Rate to track the prices of Bitcoin. Several other asset managers followed, submitting similar applications to the regulator.

In a separate report, Finance Magnates reported that Invesco and WisdomTree sought similar regulatory approval to launch their spot Bitcoin ETFs. Based in Atlanta, Georgia, Invesco is an asset management company with Assets Under Management (AUM) worth $1.4 trillion. Initially, the company attempted to launch a spot bitcoin ETF in 2021 in partnership with Galaxy Digital but was unsuccessful.

In contrast, WisdomTree, one of the major ETF providers in the US with an AUM of $83 billion, plans to list an ETF dubbed WisdomTree Bitcoin Trust. Given the regulator's approval, the fund will list on Cboe BZX Exchange under the symbol BTCW.