After the victory of Grayscale, the United States Securities and Exchange Commission (SEC) might be compelled to approve multiple exchange-traded funds (ETFs) of spot Bitcoin. However, this move is unlikely, as many analysts feel that if the SEC makes such a move, it might be disruptive and embarrassing for the body.
According to Crypto News,
“In a Friday note, JPMorgan analysts led by Nikolaos Panigirtzoglou wrote that Grayscale’s win implies that the SEC would have to retroactively withdraw its previous approval of futures-based Bitcoin ETFs in order to defend its denial of Grayscale’s proposal of converting its Bitcoin trust into an ETF.”
Last week, Grayscale won against SEC at the US Court of Appeals for the District of Columbia. The court ordered the SEC to reverse its earlier move of rejecting Grayscale’s application. SEC will need to reopen the review process. As per the court, the SEC cannot justify not approving spot Bitcoin ETFs despite approving Bitcoin futures-based ETFs.
The clout claimed that the risks of manipulation and fraud in the spot Bitcoin market are applicable to both futures and spot products. This is because of the inherent correlation between the spot market and the CME futures market.
Hence, the court ruled that the rejection of Grayscale’s proposal by the US SEC was “arbitrary and capricious.” SEC also failed to explain why it treated two products differently, although both are quite similar.
Although this ruling from the court can make the SEC approve a place for spot Bitcoin ETFs, it is not in a position to make a game-changing effect in the crypto market.
According to Coindesk.com,
“Spot-based ETFs allow investors to hold their positions indefinitely while eliminating the rollover cost associated with futures ETFs.”
Despite existing outside the USA, spot Bitcoin failed to attract a high level of interest from investors or even overall Bitcoin funds.
A passionate writer and an avid reader, Soumava is academically inclined and loves writing on topics requiring deep research. Having 3+ years of experience, Soumava also loves writing blogs in other domains, including digital marketing, business, technology, travel, and sports.