BATS OBJECTS TO BITCOIN ETF RULING, PLANS TO APPEAL DECISION

Last updated: June 19, 2025, 22:37 | Written by: Meltem Demirors

The world of cryptocurrency and traditional finance collided head-on when the Securities and Exchange Commission (SEC) initially rejected a proposal for the first Bitcoin exchange-traded fund (ETF).This decision sent ripples through the market, impacting Bitcoin's price and sparking debate about the future of crypto investments. BATS Global Markets, a global stock market exchange based in the US, plans to appeal the March 11 decision of the Securities Exchange Commission to turn down the approval of the Winklevoss twinsBATS Global Markets, now Cboe Global Markets, a prominent US-based stock market exchange, immediately voiced its strong disagreement. Bats BZX Exchange, which would have listed the first exchange-traded fund to track the price of the digital currency, is formally objecting to the SEC staff s recent rejection of the proposal.BATS, specifically through its BZX Exchange, had submitted the proposal to list and trade the ""COIN"" ETF, an ETF designed to track the price of Bitcoin.Following the SEC's rejection of the Winklevoss twins' Bitcoin ETF proposal on March 11, BATS announced its intention to appeal, signaling a significant challenge to the regulatory stance on cryptocurrency investment products. Bats BZX Exchange has submitted a notice of intention to petition for review of order disapproving its proposed rule change to list and trade Coin ETFThe exchange contended that the SEC's reasoning was flawed and that a Bitcoin ETF would provide investors with a regulated and accessible way to gain exposure to the digital asset. A federal appeals court ruled that the SEC was wrong to reject Grayscale s application to convert its flagship Grayscale Bitcoin Trust, which the SEC approved in 2025, and which holds more thanThis decision ignited a fierce debate that continues to shape the landscape of cryptocurrency investment and regulation.

The SEC Rejects the Bitcoin ETF Proposal

In early March, the SEC formally rejected the proposal put forth by Bats BZX Exchange to list and trade a Bitcoin ETF. The D.C. Circuit Court of Appeals closed the books on a dispute between the U.S. Securities and Exchange Commission (SEC) and Grayscale, with a final ruling that effectively orders the agency toThe proposed ETF, often referred to as the Winklevoss Bitcoin ETF due to its association with the Winklevoss twins, aimed to provide investors with a regulated and accessible way to invest in Bitcoin without directly holding the digital currency. BATS Global Markets, a global stock market exchange based in the US, plans to appeal the March 11 decision of the Securities Exchange Commission to turn down the approval of the Winklevoss twins Bitcoin ETF COIN.This rejection marked a significant setback for proponents of cryptocurrency investment vehicles.

The SEC's decision rested primarily on concerns regarding market manipulation and the lack of sufficient regulatory oversight in the Bitcoin market. The US Securities and Exchange Commission rejected a proposal to allow the creation of a bitcoin fund in early March, however, on March 23, the BZX exchangeThe SEC argued that, without adequate measures to prevent fraud and manipulation, a Bitcoin ETF would expose investors to undue risk.This stance reflected a broader skepticism within the regulatory agency towards the nascent cryptocurrency industry.

The implications of this rejection were immediately felt in the cryptocurrency market. In the run-up to the SEC s decision, the price of bitcoin soared to $1,350. After the SEC s rejection, the price crashed below $1,000 before jumping back up to $1,100. Appeal Holds No Guarantees. Even though Bats will appeal the decision, this doesn t guarantee that the SEC will change its decision now or anytime in the future.Leading up to the SEC's decision, the price of Bitcoin had surged, fueled by anticipation of the potential approval of a Bitcoin ETF. The U.S. securities regulator was wrong to reject an application from Grayscale Investments to create a spot bitcoin exchange-traded fund, a federal appeals court ruled on Tuesday, in a landmarkAfter the announcement, Bitcoin's price experienced a sharp decline, highlighting the sensitivity of the market to regulatory news. Bats BZX Exchange, operated by Lenexa-based Bats Global Markets, Inc. (Bats: BATS), today announced plans to appeal the SEC s ruling to reject its proposal for the first exchange-traded fund that would track the price of the Bitcoin. Announced in an order on March 10, the Securities and Exchange Commission (SEC) denied a request to approveHowever, the price quickly rebounded, demonstrating the underlying resilience of the digital asset.

BATS's Decision to Appeal the SEC Ruling

Despite the SEC's rejection, Bats BZX Exchange refused to accept defeat. A federal appeals court in Washington DC on Tuesday ruled the Securities and Exchange Commission was wrong to reject Grayscale s application to convert its flagship vehicle Grayscale BitcoinThe exchange swiftly announced its intention to appeal the SEC's decision, formally objecting to what it considered a flawed and unjustified ruling. The Bats Exchange has objected to the Securities and Exchange Commission s (SEC) rejection of the first bitcoin exchange-traded fund (ETF), which would have Facebook Instagram Mail Pinterest Reddit RSS Telegram Twitter YoutubeBats argued that the SEC's concerns about market manipulation were overstated and that the exchange had implemented robust measures to mitigate these risks.

Bats's decision to appeal underscored its commitment to bringing a Bitcoin ETF to market. Bats BZX Exchange, operated by Lenexa-based Bats Global Markets, Inc. (Bats: BATS), today announced plans to appeal the SEC s ruling to reject its proposal for the first exchange-traded fund that would track the price of the Bitcoin.The exchange believed that a Bitcoin ETF would benefit investors by providing a more efficient and transparent way to invest in Bitcoin.Furthermore, Bats contended that a regulated Bitcoin ETF would help legitimize the cryptocurrency market and attract institutional investors.

The appeal process involved submitting a petition for review to the relevant appellate court.This petition would outline Bats's arguments against the SEC's decision and request that the court overturn the ruling.The appeal process could be lengthy and complex, with no guarantee of success.Even so, Bats was determined to pursue all available legal avenues to challenge the SEC's decision.

The Long Road to Bitcoin ETF Approval: Grayscale's Victory

While BATS's initial attempt was unsuccessful, the pursuit of a Bitcoin ETF continued, eventually leading to a landmark victory for Grayscale Investments.The D.C.Circuit Court of Appeals ultimately ruled in favor of Grayscale, challenging the SEC's rejection of Grayscale's application to convert its flagship Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.This ruling marked a pivotal moment in the history of Bitcoin ETFs, setting a precedent that would ultimately pave the way for broader market access.

The court found that the SEC's rationale for rejecting Grayscale's application was inconsistent and arbitrary.The SEC had previously approved Bitcoin futures ETFs, which derive their value from Bitcoin futures contracts, but had consistently denied spot Bitcoin ETFs, which directly hold Bitcoin.The court argued that the SEC had failed to adequately explain why it treated these two types of Bitcoin ETFs differently.

This victory was not immediate, but it was a crucial step.It forced the SEC to reconsider its approach to Bitcoin ETFs and ultimately led to the approval of several spot Bitcoin ETFs in early 2024.

What Changed?The Evolution of the Regulatory Landscape

The SEC's eventual approval of spot Bitcoin ETFs represents a significant shift in the regulatory landscape.Several factors contributed to this change:

Increased Market Maturity: The Bitcoin market has matured significantly since BATS's initial attempt to launch a Bitcoin ETF.Market infrastructure has improved, and liquidity has increased, reducing the risk of market manipulation.
Regulatory Clarity: Over time, regulatory agencies around the world have provided more clarity on the treatment of cryptocurrencies.This increased clarity has helped to address some of the SEC's initial concerns.
Court Rulings: The court's ruling in favor of Grayscale played a pivotal role in forcing the SEC to reconsider its position.The court's decision highlighted the inconsistencies in the SEC's approach and compelled the agency to provide a more coherent rationale for its decisions.
Growing Institutional Interest: Increasing interest in Bitcoin from institutional investors put pressure on the SEC to provide a regulated investment vehicle.Institutional investors demand the security and transparency of traditional financial products, which a Bitcoin ETF could provide.

Understanding Bitcoin ETFs: Benefits and Risks

A Bitcoin ETF is an exchange-traded fund that tracks the price of Bitcoin.It allows investors to gain exposure to Bitcoin without directly owning the cryptocurrency.Here's a breakdown of the key benefits and risks:

Benefits of Bitcoin ETFs

Accessibility: Bitcoin ETFs are easily accessible to investors through traditional brokerage accounts.This eliminates the need to set up a cryptocurrency wallet or navigate complex cryptocurrency exchanges.
Convenience: Buying and selling Bitcoin ETFs is as simple as trading stocks.Investors can easily buy and sell shares of the ETF through their existing brokerage accounts.
Liquidity: Bitcoin ETFs are highly liquid, meaning that they can be easily bought and sold without significantly impacting the price.
Regulation: Bitcoin ETFs are subject to regulatory oversight, which provides investors with a level of protection that is not available when directly owning Bitcoin.
Tax Advantages: Depending on the investor's tax situation, investing in a Bitcoin ETF may offer certain tax advantages compared to directly owning Bitcoin.Consult with a tax professional to determine the best tax strategy.

Risks of Bitcoin ETFs

Market Volatility: Bitcoin is a highly volatile asset, and the price of a Bitcoin ETF can fluctuate significantly.Investors should be prepared for the possibility of substantial losses.
Regulatory Risk: The regulatory landscape surrounding cryptocurrencies is still evolving.Changes in regulations could negatively impact the value of Bitcoin ETFs.
Security Risk: While Bitcoin ETFs are regulated, they are still subject to security risks.A cyberattack could potentially compromise the ETF's holdings and lead to losses for investors.
Tracking Error: A Bitcoin ETF may not perfectly track the price of Bitcoin due to factors such as fees and expenses.This is known as tracking error.
Premium/Discount: The price of a Bitcoin ETF can sometimes trade at a premium or discount to the net asset value (NAV) of the underlying Bitcoin holdings.

The Impact of Bitcoin ETFs on the Cryptocurrency Market

The introduction of Bitcoin ETFs has had a significant impact on the cryptocurrency market.Here are some of the key effects:

Increased Institutional Adoption: Bitcoin ETFs have made it easier for institutional investors to gain exposure to Bitcoin, leading to increased institutional adoption of the cryptocurrency.
Greater Liquidity: Bitcoin ETFs have increased liquidity in the Bitcoin market, making it easier for investors to buy and sell Bitcoin.
Price Discovery: Bitcoin ETFs have improved price discovery in the Bitcoin market by providing a more transparent and regulated way to trade Bitcoin.
Market Maturation: The introduction of Bitcoin ETFs has contributed to the overall maturation of the cryptocurrency market, making it more appealing to a wider range of investors.
Mainstream Acceptance: Bitcoin ETFs have helped to bring Bitcoin into the mainstream, increasing its acceptance as a legitimate asset class.

What Does the Future Hold for Bitcoin ETFs?

The future of Bitcoin ETFs looks promising.As the cryptocurrency market continues to mature and regulatory clarity improves, we can expect to see further innovation in the ETF space.Some potential future developments include:

Ether ETFs: Following the success of Bitcoin ETFs, there is growing interest in Ether ETFs, which would track the price of Ether, the second-largest cryptocurrency.
DeFi ETFs: DeFi ETFs would provide investors with exposure to the decentralized finance (DeFi) sector, which is a rapidly growing area of the cryptocurrency market.
NFT ETFs: NFT ETFs would track the value of non-fungible tokens (NFTs), which are unique digital assets that represent ownership of items such as artwork, collectibles, and virtual real estate.
Actively Managed Crypto ETFs: Actively managed crypto ETFs would allow fund managers to actively manage the portfolio of cryptocurrencies, seeking to outperform the market.
Sustainable Crypto ETFs: Sustainable crypto ETFs would focus on cryptocurrencies that are more environmentally friendly, addressing concerns about the energy consumption of Bitcoin mining.

Conclusion: BATS's Early Efforts and the Evolution of Bitcoin ETFs

The initial rejection of the Bitcoin ETF proposal by the SEC and BATS's subsequent appeal marked a pivotal moment in the journey of cryptocurrency investment products.While BATS's efforts initially failed, they laid the groundwork for future attempts to bring Bitcoin ETFs to market.The eventual approval of spot Bitcoin ETFs, spearheaded by Grayscale's victory in court, represents a significant shift in the regulatory landscape and a major step forward for the cryptocurrency industry.The increased accessibility, convenience, and regulation provided by Bitcoin ETFs have opened up the world of Bitcoin investment to a wider range of investors, contributing to greater liquidity, price discovery, and mainstream acceptance.The road to regulatory approval was long and arduous, but the ultimate outcome has the potential to transform the cryptocurrency market and pave the way for further innovation in the ETF space.While BATS Objects to Bitcoin ETF Ruling, Plans to Appeal Decision remains a historical footnote, it illustrates the tenacity required to bring new financial instruments to market.As the cryptocurrency market continues to evolve, we can expect to see even more innovative investment products emerge, further integrating digital assets into the traditional financial system.