The SEC’s Rejection of Grayscale Bitcoin Trust Conversion Under Review
Grayscale Investments has urged the U.S. Securities and Exchange Commission (SEC) to reconsider its rejection of the conversion of the Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF). The SEC was recently ordered by the D.C. Circuit Court of Appeals to review its prior decision, based on the argument that the proposed product is not materially different from existing bitcoin futures exchange-traded products (ETPs) in the market.
In a letter addressed to the SEC, Grayscale’s legal team stated that after analyzing the court’s opinion, they believe there are no valid reasons to treat the GBTC differently from ETPs investing in bitcoin futures contracts. Additionally, Grayscale criticized the SEC’s history of rejecting spot bitcoin ETF applications without any notable distinctions from futures-based products.
It is important to note that the court’s decision does not guarantee approval of Grayscale’s application. The SEC is obligated to review its rejection, but the outcome remains uncertain.
Hot Take
The SEC’s reconsideration of Grayscale’s GBTC conversion could potentially pave the way for the approval of a bitcoin ETF in the future. However, it is crucial to remember that regulatory decisions in the crypto space are often complex and unpredictable.
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