SEC Still Against Spot-based Bitcoin ETFs. Is There A Light At The End Of The Tunnel?
07 July 2022 - 9:00AM
NEWSBTC
With the approvals of futures bitcoin ETFs, firms have taken it one
step further and have applied with the Securities and Exchanges
Commission (SEC) for spot-based bitcoin ETFs. However, unlike their
futures and short counterparts, the spot ETFs have not found favor
in the eyes of the regulatory watchdog. And as more spot-based
bitcoin ETF applications are declined by the SEC, questions have
arisen about whether the market will see one anytime soon.
Grayscale And Bitwise Applications Rejected Over the last month,
anticipation had built up regarding spot-based Bitcoin ETF filings
by both Grayscale and Bitwise. Grayscale had filed its application
last year, with the SEC postponing its decision multiple times, but
the firm had remained steadfast in its resolve to try to get
approval for a spot bitcoin ETF. The final decision had come last
week and it was indeed negative as experts had forecasted.
Grayscale had received a rejection on its application but it was
not the only one. Bitwise had also made a filing for a spot BTC ETF
and the SEC had also put a stamp of rejection on it too. The latter
had filed to convert its popular Grayscale Bitcoin Trust (GBTC) to
a spot-based ETF. The fund which has $12.35 billion is the largest
bitcoin trust and is looking to move to the next level. Related
Reading | Mounting Support For Bitcoin At $19,000 As Market
Ushers In A New Week At the rejection, Grayscale had swiftly filed
a lawsuit against the SEC alleging that the regulatory body has no
reason to actually deny its application. Michael Sonnenshein, CEO
of Grayscale, lamented the fact that the SEC had green-lighted four
futures bitcoin ETFs in less than one year but had refused to
approve any spot-based BTC ETF, accusing them of “acting arbitrary
and capricious.” Grayscale discount grows | Source: Arcane
Research However, the SEC has said that the rejection was due to
fears about market manipulations in the bitcoin spot markets, the
role that the stablecoin Tether will play in this, and the overall
lack of regulated exchanges and surveillance in the bitcoin market.
Bitwise on the other hand has not made any move following the
rejection and seems to be taking this one on the chin. Is A
Spot-Based Bitcoin ETF Coming? With the rejection, the reality of a
spot-based bitcoin ETF coming to the market has been pushed back
once more. Given the time frame that it took for the SEC to make a
decision on these ETFs, it is expected that filing and getting a
decision on another spot-based ETF could take almost two years or
about 18 months. This means that it is unlikely that the market
will see a spot-based BTC ETF this year contrary to what was
forecasted by market analysts in 2021. BTC holding shakily above
$20,000 | Source: BTCUSD on TradingView.com Nevertheless, Grayscale
has not backed down on its mission to turn the GBTC into a
spot-based ETF. The lawsuit is still in its early stages but the
CEO has expressed hope that they would receive a decision in the
next year. Related Reading | Institutional Investors Remain
Bearish As Short Bitcoin Sees Record Inflows Grayscale’s GBTC still
continues to trade at a heavy discount and the firm’s annual
management fee is firmly at 2%. This means that if its filing to
convert to a spot-based ETF is not approved in the next two decades
and fails to remain close-ended, it would be unable to justify the
discount at which it is currently trading. However, with the firm’s
drive to gain approval from the SEC, it is not a stretch to think
that it would get it in the next 20 years. Featured image from
Coincu News, charts from Arcane Research and TradingView.com Follow
Best Owie on Twitter for market insights, updates, and the
occasional funny tweet…
Amp (COIN:AMPUSD)
Historical Stock Chart
From Apr 2024 to May 2024
Amp (COIN:AMPUSD)
Historical Stock Chart
From May 2023 to May 2024
Real-Time news about Amp (Cryptocurrency): 0 recent articles
More Amp News Articles