Chief Executive Officer of Grayscale Investments, Michael Sonnenshein is extremely optimistic about the possibility of a Bitcoin spot ETF.
His optimism stemmed from the SEC’s approval of an application for the Teucrium Bitcoin Futures ETF in early April. The fund was filed under the Securities Act of 1933, rather than the Investment Company Act of 1940 like other futures Bitcoin funds.
As he explained:
“From the SEC standpoint, there were several protections that 40 Act products have that 33 products don’t have, but never ever did those protections address the SEC’s concern over the underlying Bitcoin market and the potential for fraud or manipulation.”
These protections, as he claimed, include an independent board, accounting procedures, and custody regulations. When asked whether there will be a Bitcoin spot ETF, he stated, “It really is, in our opinion, a matter of when, not if. If the SEC can’t look at two like issues, the futures ETF and the spot ETF, through the same lens, then it is, in fact, potentially grounds for an Administrative Procedure Act violation.”
Why do we need a Bitcoin Spot ETF?
Grayscale Investments has filed an application with the Securities and Exchange Commission to convert its Grayscale Bitcoin Trust into an ETF. The SEC has until July to respond, or the company may sue.
In contrast to futures Bitcoin ETFs, such as Teucrium, which trade on the price of Bitcoin futures, a spot Bitcoin ETF would trade on the price of Bitcoin (BTC) and would also address a larger market.
The industry has long awaited a spot Bitcoin ETF, which would allow traders to enter the market without directly investing in Bitcoin. However, their request has only been met with SEC rejections.
