Bitcoin Spot ETF Inches Closer As The SEC Asks The General Public For Comments Regarding Grayscale’s Application

• The SEC requests comments from the public as it considers Grayscale’s spot Bitcoin ETF application.
• The Commission raised similar concerns as with other spot Bitcoin ETFs.
• The move implies the decision would be delayed by another 35 days at least.

The SEC has requested comments from the public as it weighs its decision on the proposed spot Bitcoin ETF by Grayscale Bitcoin Trust (GBTC). It comes as the regulator once again delays its decision on the spot ETF proposal.

The Same Concerns, Different Day

In a document released at the end of last week, the SEC gave the public 21 days to submit comments on issues it had raised with the Grayscale spot ETF proposal. According to the document, there would also be an additional 2 week period during which comments would be responded to.

“The Commission asks that commenters address the sufficiency of the Exchange’s statements in support of the proposal, which are outlined in the Notice, in addition to any other comments they may wish to submit about the proposed rule change.”

The Gary Gensler-led SEC in the released document raises the same concerns as it did in the past over spot Bitcoin ETFs and even the Bitwise spot Bitcoin ETF currently under consideration. The regulators are not convinced that the proposal is “designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”

It is worth noting that Grayscale filed their proposal for a spot Bitcoin ETF in October last year, around the time of the approval of futures ETFs like ProShares. In December, the SEC postponed its decision on the proposed spot ETF to February. The request for comments effectively means that the decision would be further delayed by another 35 days at least.

Grayscale remains the largest crypto asset manager in the world. A tweet by the firm a couple of days ago revealed that the company had $36.5 billion in assets under its management. According to the breakdown given by the firm, its Bitcoin trust accounts for 71% of its assets under management.

The SEC’s Position On Spot Bitcoin ETFs

Gary Gensler’s SEC has remained very hesitant to approve spot Bitcoin ETFs in the United States, despite similar products being accepted in other countries like Canada. This year, the regulators have shot down two spot ETF proposals already to the dismay of enthusiasts.

Fidelity and Skybridge were the ones to be disappointed this time. Despite the desire by many investors who wish to get exposure to the Bitcoin market through spot ETFs, the SEC maintains that the proposals are yet to meet requirements against fraud. However, Bitcoin ETFs based on futures have fared better.

ProShares was the first Bitcoin ETF based on futures to be approved by the SEC. The ETF surpassed $1 billion in assets in just two days, a sign of the massive interest by investors to gain a measure. It is important to note that the SEC chair, Gary Gensler, has always expressed his belief that future Bitcoin ETFs offer more protection to investors.