The U.S Security and Exchange Commission continues to reject applications for a spot ETF while giving a stamp of approval for a futures ETF.
Grayscale, which previously filed for a Bitcoin spot ETF and was denied, has filed a letter with the DC Circuit. The letter states that there is a disparity in the SEC’s approval of a Bitcoin futures ETF while consistently denying approval for a Bitcoin spot ETF.
Grayscale is a digital currency asset management company and has been advocating to convert its Bitcoin Trust ($GBTC) into a Bitcoin Spot ETF. The asset manager filed for a Spot ETF application over a year ago in 2022, which was denied. Further, Grayscale filed a suit to challenge the commission’s decision.
Following the actions by the SEC, such as the approval of a leveraged Bitcoin futures ETF, Grayscale said, “have provided more support for our legal argument that the SEC is acting in an arbitrary manner.” The firm as well cited Volatility Shares listing of a double-bitcoin futures ETF as approved by the SEC.
According to Grayscale’s analysis of the Bitcoin futures ETF, investors face even higher risk when interacting with the product compared to traditional Bitcoin futures.
“The 2x [leveraged] bitcoin futures ETF employs leverage with the goal of doubling the performance of the S&P CME Bitcoin Futures Daily Roll Index each day. This exposes investors to an even riskier investment product than traditional bitcoin futures exchange-traded products,” Grayscale stated.
Moreover, Grayscale mentioned that while it recognizes the disparity, it does not mean a Bitcoin futures ETF should not be allowed. Instead, the asset management is pointing out that “there’s no good reason to continue to deny approval of spot products while leveraged futures products are allowed to trade.”
Finally, backing its argument, Grayscale is of the opinion that investors are more eager to interact with BTC with the protection of an ETF. Furthermore, grayscale suggested in its letter that the only way to address the SEC’s discriminatory and unequal treatment towards Bitcoin-based ETFs is to allow proposed Bitcoin spot ETFs to trade.
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