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Salty Market Reacts to SEC Rejection: 'VanEck Usually Not Snubbed'

The SEC rejected VanEck's application for a spot bitcoin ETF on grounds that it failed to meet standards to "prevent fraudulent and manipulative acts and practices."

After VanEck's application for a spot bitcoin ETF was rejected by the SEC, many on Twitter reacted with surprise and consternation.

"Kinda surprised about this, VanEck usually not snubbed," Twitter user @sxerriii wrote under the @zerohedge fund that was one of the first to break the news.

The SEC ruling said that any Bitcoin ETFs need to show a "comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets" as well as demonstrate its commitment to preventing fraud. 

While some cybersecurity experts celebrated the decision, others pointed out that it would merely delay an inevitable shift toward cryptocurrency's widespread use.

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"Would have been nice if the SEC let me go get lunch before remaining consistent in their view that spot #bitcoin #ETF can’t protect investors from fraud," Todd Rosenbluth, CFRA Research's Director of Mutual & Exchange Traded Fund Research, wrote on his Twitter page. "$BITO to likely benefit."

One of the most widely reshared tweets on the subject was of Digital Currency Group founder Barry Silbert with the joke that it would be approved next.

The news did come as a surprise to many since, as far as a week before the announcement, some investors were speculating on whether Bitcoin would reach $80,000 in value if it was approved.

Before the decision, some warned that a denial from the SEC would lead to a price correction as occurred when Bitcoin was rejected by U.S. regulators in 2017. 

Even before the rejection, asset manager Eric Weiss speculated that a rejection could open up an opportunity to buy Bitcoin during a dip — whether that turns out to be the case will become more clear with time. At close on Friday, Bitcoin was down 0.75% to $64,306.