ETF News | SEC to Evaluate Grayscale ETF, US Congressmen Write to SEC Chairman: Why Hasn't a Bitcoin Spot ETF Been Approved?

Despite the milestone of Bitcoin futures ETF launch, there is still a high demand in the market for a "spot ETF." In response to this, the U.S. Securities and Exchange Commission (SEC) has opened a public comment period for the GBTC ETF proposal submitted by Grayscale. Additionally, Congressmen Emmer and Soto have sent a letter to the SEC Chairman, emphasizing the necessity of a spot ETF.

SEC Evaluates GBTC ETF

Previously reported, Grayscale's Grayscale filed a 19b-4 document with NYSE Arca on 10/19, applying to convert GBTC to a Bitcoin spot ETF.

On 11/2, the SEC released a public comment solicitation for the application. The SEC is expected to make a decision as early as 12/24 this year, but based on past records, there is a high probability of delaying Grayscale's application.

Congressmen: We Need a Spot ETF

Congressmen Tom Emmer and Darren Soto wrote a letter to SEC Chairman on 11/3 emphasizing the necessity of a spot ETF. The letter mentioned that the SEC's approval of a Bitcoin futures ETF was a significant step for Americans but also pointed out the drawbacks of a futures ETF:

• Volatility may be greater than a spot ETF
• Rollover costs lead to higher expenses

The congressmen believe that the SEC's previous reasons for not approving any ETF were potential fraud and market manipulation. However, given the launch of a futures-based ETF, there should be a reconsideration for a spot ETF as well.

For example, investors can trade the spot ETF "GLD" based on the 1993 Securities Act regulations or the futures ETF "DGL" registered under the 1940 Investment Company Act.

Over the past 15 years of trading history, GLD is the largest commodity-based ETF with a scale of $55.5 billion and no significant investor protection issues. In contrast, the futures-based DGL has a scale of only $50.4 million, less than 1% of the spot ETF, indicating that investors prefer spot ETFs.

The congressmen emphasized:

Unless there is concrete evidence to show that a futures ETF offers better investor protection, users should be free to choose products and underlying assets. We do not understand the SEC's perception of risk differences because the futures and spot markets interact, and the risks of fraud, market manipulation, and other aspects should be the same. The SEC should approve a spot ETF, and we look forward to your response.

Ethereum ETF Sooner than Bitcoin Spot ETF?

Although the market desires a spot ETF, given the SEC's preference for futures ETFs, there is an increasing possibility that an Ethereum futures ETF will be launched before a Bitcoin spot ETF.

Bloomberg ETF analyst James Seyffart stated that compared to a Bitcoin spot ETF, the crypto market may see an Ethereum futures ETF sooner.

FTX founder Sam Bankman-Fried also pointed out in an interview with Bloomberg that if an Ethereum futures ETF is launched first, he would not be surprised.