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Bitcoin Jumps as GBTC Ruling Paves Way for Spot ETF
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Bitcoin and other crypto assets are surging today after an appeals court ruled in favor of Grayscale on the lawsuit it filed against the SEC over the conversion of its $16.2 billion Grayscale Bitcoin Trust (GBTC - Free Report) into an ETF.
The SEC could still fight the ruling or deny the conversion for some other technical reason, but the decision has increased pressure on the regulator to approve spot bitcoin ETFs.
BlackRock (BLK - Free Report) , the world's largest asset manager, and many other ETF providers, including Bitwise, WisdomTree (WT - Free Report) , Invesco (IVZ - Free Report) , and Valkyrie, have filed for spot ETFs in the past few weeks.
Earlier, the SEC had rejected more than 30 spot bitcoin ETF applications over concerns about fraud and market manipulation, as well as the need for a "comprehensive surveillance-sharing agreement with a regulated market of significant size."
Grayscale argued that the surveillance arrangements for futures-based ETFs should also be satisfactory for spot-based ETFs, since both products rely on bitcoin's underlying price.
The ruling states that "Grayscale presented uncontested evidence that there is a 99.9 percent correlation between bitcoin's spot market and CME futures contract prices." It also noted that "the listing exchanges for Grayscale and the bitcoin futures ETPs have identical surveillance sharing agreements with the CME, on which bitcoin futures trade."
Coinbase (COIN - Free Report) , the largest publicly traded crypto exchange which is listed as the custodian partner in many of the proposed spot bitcoin ETFs, is up more than 14% today.
The ProShares Bitcoin Strategy ETF (BITO), the first US-listed ETF that provides exposure to bitcoin through futures, gathered over $1 billion within two days of its launch, while those that entered the market later struggled to gather assets.
The first-mover advantage is significant in the ETF world, as we have seen in many cases, so no provider wants to be left behind. We could see many spot bitcoin ETFs available to investors in the coming months, though it is not yet certain that the SEC will finally greenlight these products.
Image: Bigstock
Bitcoin Jumps as GBTC Ruling Paves Way for Spot ETF
Bitcoin and other crypto assets are surging today after an appeals court ruled in favor of Grayscale on the lawsuit it filed against the SEC over the conversion of its $16.2 billion Grayscale Bitcoin Trust (GBTC - Free Report) into an ETF.
The SEC could still fight the ruling or deny the conversion for some other technical reason, but the decision has increased pressure on the regulator to approve spot bitcoin ETFs.
BlackRock (BLK - Free Report) , the world's largest asset manager, and many other ETF providers, including Bitwise, WisdomTree (WT - Free Report) , Invesco (IVZ - Free Report) , and Valkyrie, have filed for spot ETFs in the past few weeks.
Earlier, the SEC had rejected more than 30 spot bitcoin ETF applications over concerns about fraud and market manipulation, as well as the need for a "comprehensive surveillance-sharing agreement with a regulated market of significant size."
Grayscale argued that the surveillance arrangements for futures-based ETFs should also be satisfactory for spot-based ETFs, since both products rely on bitcoin's underlying price.
The ruling states that "Grayscale presented uncontested evidence that there is a 99.9 percent correlation between bitcoin's spot market and CME futures contract prices." It also noted that "the listing exchanges for Grayscale and the bitcoin futures ETPs have identical surveillance sharing agreements with the CME, on which bitcoin futures trade."
Coinbase (COIN - Free Report) , the largest publicly traded crypto exchange which is listed as the custodian partner in many of the proposed spot bitcoin ETFs, is up more than 14% today.
The ProShares Bitcoin Strategy ETF (BITO), the first US-listed ETF that provides exposure to bitcoin through futures, gathered over $1 billion within two days of its launch, while those that entered the market later struggled to gather assets.
The first-mover advantage is significant in the ETF world, as we have seen in many cases, so no provider wants to be left behind. We could see many spot bitcoin ETFs available to investors in the coming months, though it is not yet certain that the SEC will finally greenlight these products.
Will the SEC Approve Spot Bitcoin ETFs in 2023?