SEC Denial of Grayscale’s ETF Proposal
The Securities and Exchange Commission (SEC) is facing pressure to approve spot bitcoin exchange-traded-fund (ETF) applications after a federal court ruled that the regulator must review its rejection of Grayscale’s attempt to convert the Grayscale Bitcoin Trust (GBTC) into an ETF, according to JPMorgan.
Main Breakdowns:
- The SEC may be forced to approve spot bitcoin ETF applications after a court ruling.
- The court found the SEC’s denial of Grayscale’s proposal to be arbitrary and capricious.
- The court argued that fraud and manipulation exist in both spot and futures markets.
- The SEC would have to retroactively withdraw its previous approval of futures-based bitcoin ETFs to defend its denial of Grayscale’s proposal.
- An approval of spot-based ETFs is unlikely to be a game changer for the crypto market.
While the Grayscale ruling may bring the approval of a spot bitcoin ETF closer, it is unlikely to significantly impact the crypto market. Spot-based ETFs have been available outside the US but have failed to attract considerable investor interest. The crypto market remains hopeful that the eventual launch of spot-based ETFs will attract mainstream money.
Hot Take:
The SEC may face pressure to approve spot bitcoin ETF applications following the court ruling on Grayscale’s proposal. However, the impact on the crypto market may not be as significant as anticipated, as spot-based ETFs have previously struggled to attract investor interest. Despite this, the potential approval of spot-based ETFs could open doors for mainstream investment in the crypto market.
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