Grayscale Questions SEC’s Approval of Leveraged 2x Bitcoin ETF
Grayscale Investments has raised concerns about the approval of a leveraged 2x Bitcoin ETF by the US SEC while their spot Bitcoin ETF application was denied. They sent a letter to the US Court of Appeal, questioning the rationality behind this decision. Grayscale believes that the approved product, Volatility Shares’ 2X Bitcoin Strategy ETF (BITX), is riskier than their proposed spot Bitcoin ETF. They argue that the SEC’s inconsistency in approving a riskier product undermines their refusal to approve a safer one.
– Grayscale applied for a spot Bitcoin ETF but was denied by the SEC.
– They question why the SEC approved a riskier product, BITX, while rejecting their application.
– The approved ETF seeks to double the performance of the S&P CME Bitcoin Futures Daily Roll Index and is leveraged.
– Grayscale highlights the contradiction in the SEC’s stance on spot Bitcoin ETPs and Bitcoin futures ETPs.
– The SEC’s refusal was based on concerns about monitoring spot prices, but Grayscale argues that futures prices are derived from spot markets.
Hot Take
Grayscale Investments raises valid questions about the SEC’s decision-making process regarding Bitcoin ETFs. The approval of a leveraged 2x Bitcoin ETF while denying a spot Bitcoin ETF seems contradictory. This inconsistency undermines the SEC’s credibility and raises doubts about their ability to regulate the cryptocurrency market effectively. It is crucial for regulators to provide clear and consistent guidelines to foster investor confidence and promote a fair and transparent market.
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