US Government Shutdown Stated As a Key Reason for VanEck/SolidX Bitcoin ETF Withdrawal

The longest government shutdown in US history is impacting Bitcoin in surprising ways, as one result has been the withdrawal of the VanEck ETF proposal.

government shutdown

The fight over the southern border wall and subsequent government shutdown appear to be impacting the crypto community.

The longest shutdown in US history has continued for more than a month, resulting in funding issues for several government agencies.

Forbes reported that with many federal government employees furloughed due the partial shutdown and with the deadline for the ETF’s approval fast approaching, Cboe decided to withdraw their SolidX and VanEck application.

Vaneck Bitcoin ETF Application Withdrawn, Will Reapply Later

One of the most awaited ETF proposals in the crypto industry, by investment firm VanEck and financial services provider SolidX, was withdrawn recently.

Owing to the US government shutdown, the ETF proposal will be put on hold till a later date when VanEck reapplies. The ETF was set to be listed on the Cboe BZX Exchange.

The ETF could have brought new investors to the stagnating market which has been trapped in a year-long bear market.

However, it must be noted that the ETF proposal faced an uphill to gain approval. The SEC had previously stated concerns about Bitcoin’s susceptibility to market manipulation.

The SEC had also to decide the fate of the ETF proposal by February 27 and the proposal had already been delayed several times.

Regarding the withdrawal, Jan van Eck the CEO of VanEck stated to CNBC that:

 “The SEC is affected by the shutdown… we were engaged in discussions with the SEC about the bitcoin-related issues, custody, market manipulation, prices, and that had to stop. And so, instead of trying to slip through or something, we just had the application pulled and we will re-file and re-engage in the discussions when the SEC gets going again.”

How Did Bitcoin’s Price React?

After the decision to withdraw the application was announced in an SEC filing, the price of Bitcoin dipped slightly but continued to trade over $3,500, an area it has maintained since early January.

No crash in Bitcoin’s price has been seen yet as a result of the application withdrawal.

Cboe seconded VanEck’s statement, suggesting that the government shutdown was the reason behind the withdrawal and that they intend to reapply and continue their talks with the agency.

Mati Greenspan, eToro’s senior market analysts, noted that the proposal had a slim chance of success since the SEC chairman Jay Clayton does not believe that the BTC market is mature enough yet for an ETF.

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