SEC delays decision over Grayscales ETF proposal banner image main

The US SEC delays decision over Grayscale’s ETF proposal

Last February 4, the United States Securities and Exchange Commission (SEC) announced through their official government website about the initial proceedings regarding the proposal of global digital currency manager Grayscale’s Bitcoin Trust (GBTC) to turn into an exchange-traded fund (ETF). However, the SEC has delayed their decision on whether or not to approve this application for various concerns relating to the manipulation, liquidity and transparency of the assets as stated in the same document.

The regulating body was not convinced that the proposal was enough to refrain from any possible fraud and manipulation in the Bitcoin (BTC) market. They also encouraged the public to comment about these issues by submitting written data to the SEC.

Famous Bitcoin investor and entrepreneur Anthony Pompliano posted a tweet on February 5 to share the news about the SEC’s plans. This received mixed reactions from different people. Some of them expressed their surprise while others believe that the proposal will most likely be rejected.

On another hand, crypto news site Cointelegraph has reported about Grayscale’s first application to convert their shares of GBTC into a spot Bitcoin ETF in a proposal submitted to the SEC in October 2021. Less than two months later, the regulator announced that they will be postponing their decision through an online notice on December 17, which was supposed to be released in February of this year. The same thing happened to Bitwise, a digital asset management company that had a similar proposal to Grayscale.

Although the SEC is hesitant to approve a spot Bitcoin ETF proposal, they have shown interest in futures-linked products as Cointelegraph reported on December 23, 2021. An example of this is the ProShares Bitcoin Strategy ETF which was the first futures-linked exchange-traded fund in the United States. They began trading in the New York Stock Exchange (NYSE) with an opening price of $40 per share. 

Moreover, as seen in their official Twitter account, Grayscale is a traditional investment platform with $36.5 billion in assets as of February 4, 2022. In terms of its GBTC products, it covers around 71% of its total assets.

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