SEC Still Against Spot-based Bitcoin ETFs. Is There A Light At The End Of The Tunnel?

With the approvals of futures bitcoin ETFs, firms person taken it 1 measurement further and person applied with the Securities and Exchanges Commission (SEC) for spot-based bitcoin ETFs. However, dissimilar their futures and abbreviated counterparts, the spot ETFs person not recovered favour successful the eyes of the regulatory watchdog. And arsenic much spot-based bitcoin ETF applications are declined by the SEC, questions person arisen astir whether the marketplace volition spot 1 anytime soon.

Grayscale And Bitwise Applications Rejected

Over the past month, anticipation had built up regarding spot-based Bitcoin ETF filings by some Grayscale and Bitwise. Grayscale had filed its exertion past year, with the SEC postponing its determination aggregate times, but the steadfast had remained steadfast successful its resoluteness to effort to get support for a spot bitcoin ETF. The last determination had travel past week and it was so antagonistic arsenic experts had forecasted.

Grayscale had received a rejection connected its exertion but it was not the lone one. Bitwise had besides made a filing for a spot BTC ETF and the SEC had besides enactment a stamp of rejection connected it too. The second had filed to person its fashionable Grayscale Bitcoin Trust (GBTC) to a spot-based ETF. The money which has $12.35 cardinal is the largest bitcoin spot and is looking to determination to the adjacent level.

Related Reading | Mounting Support For Bitcoin At $19,000 As Market Ushers In A New Week

At the rejection, Grayscale had swiftly filed a suit against the SEC alleging that the regulatory assemblage has nary crushed to really contradict its application. Michael Sonnenshein, CEO of Grayscale, lamented the information that the SEC had green-lighted 4 futures bitcoin ETFs successful little than 1 twelvemonth but had refused to o.k. immoderate spot-based BTC ETF, accusing them of “acting arbitrary and capricious.” 

Grayscale discount grows | Source: Arcane Research

However, the SEC has said that the rejection was owed to fears astir marketplace manipulations successful the bitcoin spot markets, the relation that the stablecoin Tether volition play successful this, and the wide deficiency of regulated exchanges and surveillance successful the bitcoin market.

Bitwise connected the different manus has not made immoderate determination pursuing the rejection and seems to beryllium taking this 1 connected the chin.

Is A Spot-Based Bitcoin ETF Coming?

With the rejection, the world of a spot-based bitcoin ETF coming to the marketplace has been pushed backmost erstwhile more. Given the clip framework that it took for the SEC to marque a determination connected these ETFs, it is expected that filing and getting a determination connected different spot-based ETF could instrumentality astir 2 years oregon astir 18 months. This means that it is improbable that the marketplace volition spot a spot-based BTC ETF this twelvemonth contrary to what was forecasted by marketplace analysts successful 2021.

BTC holding shakily supra $20,000 | Source: BTCUSD connected TradingView.com

Nevertheless, Grayscale has not backed down connected its ngo to crook the GBTC into a spot-based ETF. The suit is inactive successful its aboriginal stages but the CEO has expressed anticipation that they would person a determination successful the adjacent year.

Related Reading | Institutional Investors Remain Bearish As Short Bitcoin Sees Record Inflows

Grayscale’s GBTC inactive continues to commercialized astatine a dense discount and the firm’s yearly absorption interest is firmly astatine 2%. This means that if its filing to person to a spot-based ETF is not approved successful the adjacent 2 decades and fails to stay close-ended, it would beryllium incapable to warrant the discount astatine which it is presently trading. However, with the firm’s thrust to summation support from the SEC, it is not a agelong to deliberation that it would get it successful the adjacent 20 years.

Featured representation from Coincu News, charts from Arcane Research and TradingView.com

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