The introduction of the Bitcoin Spot Exchange-Traded Funds (ETFs) has been a pivotal development in the cryptocurrency market, but some ETF issuers have failed to respond to certain requirements, leading to the rejection of their application.

SkyBridge’s Bitcoin ETF Application Gets Abandoned

Amid the growing adoption of the Bitcoin spot ETFs, investment management firm SkyBridge Capital has been dealt a blow as its First Trust-SkyBridge’s BTC ETF Trust has been declared abandoned by the United States Securities and Exchange Commission (SEC).

Senior Bloomberg Intelligence ETF analyst and crypto advocate Eric Balchunas took to the social media platform X (formerly Twitter) to share the development with the cryptocurrency community.

Eric Balchunas disclosed that the First Trust SkyBridge Bitcoin ETF is being ordered by the SEC to declare their filing “abandoned.” According to the Bloomberg expert, he is uncertain of the reason behind the event, since First Trust was “one of the filers who refrained from engaging in the post-BLK race. “

He further noted that First Trust SkyBridge Bitcoin ETF Trust would have increased fund inflows by possibly 15% had the SEC approved the ETF’s launch “since First Trust is a sales machine.”

In the screenshot of the filing shared by Balchunas, the SEC stated that “SkyBridge has not complied with the warning under Rule 479,” which states that if the statement is not “timely amended or withdrawn,” it will be deemed abandoned.

It is noteworthy that SkyBride Capital was one of the earliest firms to file for a Bitcoin ETF. However, the regulatory watchdog rejected it in January 2022, and the company did not reapply for the introduction of the ETF.

Under section 6(a) of the Securities Act of 1933, First Trust SkyBridge BTC ETF registered securities with the agency by filing a registration statement. However, nine months since the registration statement was filed, it still has not gone into effect.

As a result, the registration statement was ordered to be declared abandoned on Tuesday, March 12, by the Division of Corporation Finance on behalf of the Commission, in accordance with its regulations.

Grayscale Secures Second Spot In Largest ETF Outflows

Despite leading companies like Blackrock witnessing significant inflows since the launch of the Bitcoin ETFs, Grayscale, on the other hand, has been seeing notable outflows. Balchunas revealed that in the past 15 years, Grayscale Bitcoin Trust ETF (GBTC) has had the “second-biggest cumulative outflows” of any ETF.

So far, GBTC has witnessed a cumulative outflow of approximately $10.553 billion. Meanwhile, EEM (iShares MSCI Emerging Markets ETF) is currently in the top spot in terms of outflows, with $12.341 billion. 

This is intriguing since EEM catalyzed the creation of BlackRock’s mini-me move with IEMG, which Grayscale is executing with BTC and GLD with GLDM.

Other notable companies that have seen substantial outflows include SPDR Gold Shares (GLD), SPDR S&P MidCap 400 ETF Trust (MDY), and United States Fund LP (USO), among others.