The battle for a US exchange traded fund (ETF) that directly invests in bitcoin has reached a new milestone as the regulatory body has chosen not to contest a court ruling against it.
By declining to appeal the federal appeals court ruling that rejected the US Securities and Exchange Commission’s (SEC) rejection of Grayscale Investments’ application to convert its Bitcoin Trust (GBTC) into an ETF, the SEC has moved closer to allowing the launch of a bitcoin ETF.
In the ruling, Judge Neomi Rao criticized the SEC for its inconsistency in rejecting applications for “spot” bitcoin ETFs while approving ETFs that trade in bitcoin futures contracts. This decision has led investors to reduce GBTC’s discount to net asset value, indicating their expectations that the trust may convert into an ETF.
As a result of the SEC not appealing the ruling, the floodgates could potentially open for numerous spot bitcoin ETFs from asset managers such as Grayscale, BlackRock, Fidelity, Ark Invest, WisdomTree, VanEck, and Valkyrie, who all have pending filings.
Several of these applicants have updated their filings, addressing concerns about the use of bitcoin in illicit transactions and the environmental impact of digital asset mining operations. This has prompted speculation that the SEC may be engaged in discussions with these applicants.
The increasing emergence of crypto-backed businesses by major US financial services firms like BlackRock and Fidelity has also added to the sense that a spot bitcoin ETF is inevitable in the US.
Similar products already exist in Canada and Europe without significant issues.
Todd Rosenbluth, head of research at VettaFi, believes the SEC may adopt a similar approach to its recent launch of ether-based ETFs, where multiple funds were allowed to list on the same day to avoid giving one firm a competitive advantage.
With the potential approval of spot bitcoin ETFs, mainstream investment in the cryptocurrency industry could increase, and registered investment advisers may gain access to spot crypto for client portfolios.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
