Grayscale’s Message to the SEC: No More Excuses for Denying Bitcoin Spot ETF
After successfully challenging the regulator in court, Grayscale has sent a letter to the Securities and Exchange Commission (SEC) with important messages regarding the approval of a Bitcoin spot ETF. Grayscale firmly believes that the commission has exhausted all reasons to continue denying the launch of such an ETF. In their comment letter, Grayscale urges the SEC to swiftly move towards approving spot ETFs, emphasizing that there are no grounds to differentiate them from futures ETFs. Grayscale points out that if there were any valid reasons to treat spot Bitcoin ETFs differently, they would have been mentioned in the Commission’s previous rejections of spot Bitcoin filings.
Grayscale’s Lawsuit and the Court’s Ruling
Grayscale’s lawsuit against the SEC accused the agency of favoring Bitcoin futures ETFs over spot ETFs without reasonable justification. The court ruled in favor of Grayscale, stating that the SEC was being unreasonable in discounting the clear financial and mathematical relationship between the spot and futures markets. Grayscale also highlights the excessive delay in the approval of its filing to convert its Bitcoin Trust into a spot ETF, which has been pending for much longer than the SEC’s allowed approval/denial deadline. The recent denial of the application has been vacated due to Grayscale’s lawsuit, raising doubts about the SEC’s obligation to act promptly.
The Importance of Spot ETFs and Surveillance-Sharing Agreements
Grayscale stresses that the SEC’s delay in approving spot ETFs is detrimental to existing GBTC investors and points out that investors overwhelmingly prefer spot ETFs over futures ETFs. Additionally, Grayscale reminds the SEC that other spot ETF applicants are seeking surveillance-sharing agreements with Coinbase to meet the agency’s requirements. Grayscale, which aims to secure a similar arrangement with the Chicago Mercantile Exchange, argues that the CME alone should be sufficient to gain approval. The company believes that the SEC should not impose any new requirements, such as a surveillance-sharing agreement, on spot Bitcoin ETFs.
Hot Take: The SEC’s Next Move
The court’s ruling in favor of Grayscale and the company’s strong arguments have left the SEC with no valid reasons to continue denying the launch of a Bitcoin spot ETF. It remains to be seen how the SEC will respond to Grayscale’s messages and whether they will finally approve the much-anticipated spot ETF. The spotlight is now on the SEC to take decisive action and address the concerns raised by Grayscale and other industry players.
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