Grayscale: The SEC must get comfortable with spot Bitcoin ETF

Michael Sonnenshein, CEO of the largest bitcoin and crypto money Grayscale, has argued that the SEC’s justifications of wherefore it approved Bitcoin futures ETFs but not spot ETFs, don’t adhd up.

The crippled thickens connected the way to $GBTC’s spot #Bitcoin #ETF conversion…

— Sonnenshein (@Sonnenshein) April 7, 2022

The tweet was posted moments aft the U.S. Securities and Exchange Commission (SEC) officially approved different Bitcoin futures Exchange Traded Fund (ETF) — the Teucrium ETF — totaling 4 ETFs successful the U.S. market.

ETFs are fiscal products that travel the worth of an underlying asset, successful this case, Bitcoin (BTC).

“Today, the SEC approved different US-based Bitcoin futures ETF. Great, right? We agree. But it’s important to recognize that not each Bitcoin futures ETFs are created equal,”

Sonnenshein continued connected twitter.

Over 80-year-old acceptable of regulations

Prior to this latest support by the SEC, the U.S. had 3 Bitcoin futures ETFs: BITO, XBTF, and BTF. Each of these holds Chicago Mercantile Exchange (CME) Bitcoin futures and are registered nether the alleged ’40 Act – an implicit 80-year-old acceptable of regulations that govern galore concern products connected the marketplace today.

As of today, those arguments person been importantly weakened arsenic the SEC approved the Teucrium #Bitcoin Futures ETF, which is registered nether the '33 Act, and not the ‘40 Act.

— Sonnenshein (@Sonnenshein) April 7, 2022

Sonnenshein continues to analyse the imaginable interaction to spot bitcoin ETF applicants, including, not surprisingly, Grayscale’s ain application.

First, the SEC has a weaker statement that the antithetic protections & standards that use to the ‘40 Act vs. the ‘33 Act are reasons for denying spot #Bitcoin #ETFs, contempt utilizing that statement for each azygous spot Bitcoin ETF denial since Bitcoin futures ETFs started trading.

— Sonnenshein (@Sonnenshein) April 7, 2022

What’s a “regulated marketplace of important size”?

Sonnenshein besides argued that the SEC made absorbing commentary connected the Teucrium approval, peculiarly concerning what it refers to arsenic “regulated markets of important size”.

Historically, the SEC asserted that the lack of regulated markets of important size related to the underlying assets — i.e. bitcoin — was a captious and/or missing constituent to the support of a spot bitcoin ETF.

“Today, successful approving Teucrium’s exertion nether the ‘33 Act, the SEC cleverly decided to specify the “market” arsenic conscionable the CME Group and the “underlying assets” arsenic conscionable CME bitcoin futures, which of people makes CME important since it [has] 100% of the CME bitcoin futures market!”

According to Sonnenshein, who besides said:

“What’s incorrect with this argument? Well, digging deeper, let’s retrieve that CME bitcoin futures are priced based connected spot Bitcoin markets [Sonnenshein’s emphasis] and truthful straight influenced by them.”

Today Grayscale’s statement becomes adjacent stronger

According to Sonnenshein, the SEC adjacent acknowledges the nexus successful its support of Teucrium and this makes Grayscale’s statement “even stronger.”

Therefore, if the SEC is comfy with a #Bitcoin futures #ETF, they indispensable besides beryllium comfy with a spot Bitcoin ETF. And they tin nary longer justifiably mention the ‘40 Act arsenic being the differentiating factor.

— Sonnenshein (@Sonnenshein) April 7, 2022

Sonnenshein’s tweet menace was soon retweeted by Barry Silbert, CEO of Grayscale’s genitor institution Digital Currency Group, saying the “sec delay” needed to beryllium stopped. He added that:

“The SEC is moving retired of excuses for not approving a spot based bitcoin ETF.”

Since filing their exertion for a bitcoin spot ETF, Grayscale has acceptable up a service aiding supporters to easy nonstop emails to the SEC.