SEC To Deny Grayscale’s Spot Bitcoin ETF Application AgainJune 29, 2022 9:23 pm
The CEO of Grayscale, Michael Sonnenshein, just shared that 99% of the letters that the SEC received were supportive of the approval of a spot Bitcoin ETF.
Additionally, around 33% of the letters were questioning why a spot Bitcoin ETF hadn’t already been approved as investment products that involve BTC futures have already been approved.
Much attention is on Grayscale’s application as the deadline for approval by the SEC is coming close and the agency will have to give a response.
The deadline is on July 6 and the applications are part of a long line of applications where all the previous ones have been rejected so far.
Overall sentiment is that the SEC will likely deny it again.
Sec Rejects ETF @Grayscale
Is the problem with the SEC the usability of BITCOIN or is their concern linked to the DOLLAR? It is a little puzzling that the SEC is so reluctant to approve BITCOIN ETFs that are being swayed by large companies active in the cryptocurrency sector. pic.twitter.com/Rt6J9wErDR
— Tio Patinhas.eth (@CryptoPatinhas) June 30, 2022
“It seems that it’s no longer a question of ‘if’ but just a question of ‘when’ the SEC will finally approve a spot ETF,” Bradley Duke, co-CEO of London-based ETF issuer ETC Group.
“But the current crypto market turbulence, including the fallout from the collapse of UST and Terra Luna and the distress of major crypto finance firms like Celsius and BlockFi, could all contribute to giving the SEC reason to delay further opening of the floodgates.”
And a dragged-out process may not be the best sign for the sector, according to Oppenheimer equity research analyst Owen Lau.
“It appears to me that the longer it takes, the farther the industry tends to walk away from the SEC, and the harder it becomes to get the approval,” Lau told CoinDesk.
“The chance that it might take a very long time to get the spot ETFs approval, or it might never get approved by the SEC, has been increasing.”
Bitwise Chief Investment Officer Matt Houganis still optimistic about an eventual approval though.
Ultimately, a spot Bitcoin ETF will lower costs and make the Bitcoin market extremely accessible by all investors within the country.
As a result, an approval will likely be a bullish catalyst for the crypto market which is why many digital asset managers are pushing for the approval.
The SEC has not yet commented on the possibility and SEC chair Gary Gensler has always pivoted away from the question when asked.
A few hours later Grayscale Initiated Lawsuit Against the SEC – challenging the decision by SEC to deny conversion of GBTC to a spot ETF.
— venturef◎undΞr (@venturefounder) June 30, 2022
SEC chair Gary Gensler has often pivoted in interviews when questioned as to when the commission could approve a spot Bitcoin ETF, saying in February that he would give the matter “careful consideration.”
“[In my opinion] the chances of GBTC being allowed to convert to an ETF next week are 0.5%,” said Bloomberg ETF analyst Eric Balchunas. “About the same odds the NY Jets have of winning the Super Bowl.”
It’s unclear what moves Grayscale may make if the SEC denies its application next week. The firm said it was “unequivocally committed” to converting its BTC trust to an ETF, hiring a former U.S. Solicitor General in June to work as a senior legal strategist for its application.
In May, the digital asset manager launched a crypto-linked ETF on the London Stock Exchange, Borsa Italiana and Deutsche Börse Xetra.
Update: It is confirmed that the SEC has denied Grayscale’s spot Bitcoin ETF application again and that Grayscale is now filed a lawsuit.
CryptoWhale: BREAKING: SEC has denied Grayscale's application to convert its $13.5 billion $BTC Trust into a #Bitcoin ETF, citing #Tether fraud and price manipulation as reasons why. pic.twitter.com/urERAJORyf
— Faisals Crypto News (@faisalscrypto) June 30, 2022
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