Grayscale Calls for Swift Approval of Spot Bitcoin ETF by SEC, Citing Unjustified Investor Harm

Grayscale Calls for Swift Approval of Spot Bitcoin ETF by SEC, Citing Unjustified Investor Harm


Grayscale Urges SEC Approval for Grayscale Bitcoin (BTC) Trust Conversion

Grayscale Investments is pushing the Securities and Exchange Commission (SEC) to provides approval for converting its Grayscale Bitcoin (BTC) Trust (GBTC) into a spot Bitcoin (BTC) ETF. The company is warning that the SEC’s delay in approving the conversion is harming investors unjustifiably. In a letter sent to the SEC on September 5, Grayscale’s lawyers argue that there are no grounds for treating GBTC differently from Bitcoin (BTC) futures ETFs, which the SEC already permits. Grayscale emphasizes that the delay in granting approval is causing competitive harm to investors and spot Bitcoin (BTC) product issuers like themselves. They believe that investors and spot Bitcoin (BTC) product issuers deserve a level playing field as soon as possible.

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Landmark Legal Win for Grayscale

In a whole lot of victory for Grayscale against the SEC, a court criticized the regulator’s decision to approve futures ETFs but not spot Bitcoin (BTC) investment products. The court labeled the decision as “arbitrary and capricious.” Grayscale successfully claimed that spot Bitcoin (BTC) ETFs are materially similar to Bitcoin (BTC) futures exchange-traded products that have already received approval from the SEC. This legal triumph sparked a rally in digital currency assets and is seen as a breakthrough for an industry struggling against the SEC’s regulation-by-enforcement approach.

Implications of Spot Bitcoin (BTC) ETF Approval

The approval of spot Bitcoin (BTC) ETFs, particularly those backed by major investment corporations like BlackRock and Fidelity, would be a whole lot of milestone for the cryptocurrency industry. It is expected to drive increased demand for Bitcoin, with New York Digital Investment Group predicting an influx of $30 billion. 7 corporations, including BlackRock and Fidelity, have submitted applications to the SEC for spot Bitcoin (BTC) ETFs. Nonetheless, the SEC has once more delayed a decision on these applications, causing turmoil in the cryptocurrency market. Although while the SEC has extended the period for public feedback on the applications, the final deadlines for a decision are expected to be around mid-March 2024.

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Harm Caused by SEC’s Delay

Grayscale’s lawyers highlight the harm caused by the SEC’s delay in approving the conversion of GBTC into a spot Bitcoin (BTC) ETF. They point out that on the day of Grayscale’s legal victory over the SEC, a Bitcoin (BTC) futures exchange-traded product experienced a whole lot of increase in net inflows. It received over 800% more inflows than its average daily inflow for the past 30 days. Grayscale’s lawyers argue that it is reasonable to assume that the Trust would have attracted a substantial portion of this investment financial resources if it had been operating as an ETP on that day. The delay in approval has prevented the Trust from capitalizing on this opportunity.

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Hot Take

The SEC’s delay in approving the conversion of Grayscale Bitcoin (BTC) Trust into a spot Bitcoin (BTC) ETF is causing unjustified harm to investors and hindering the expansion of the cryptocurrency industry. The approval of spot Bitcoin (BTC) ETFs, backed by prominent investment corporations, has the  capacity to revolutionize the industry and attract whole lot of new demand for Bitcoin. The SEC should expedite the approval process to secure a fair playing field for investors and allow the cryptocurrency industry to thrive.

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Insa’s extensive background in the financial realm encompasses roles as a writer, trader, and personal finance coach. Her proficiency spans a wide spectrum, ranging from commodities and indices to forex and cryptocurrencies. Insa’s specialization lies in furnishing strategic investment advice tailored to the fintech investment niche.

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