brokerage firm Bernstein believes that there is a strong possibility that the US National Stock Market Commission will approve a place Bitcoin (BTC) exchange traded funds (ETFs).
in a research report published On Monday, Bernstein said the SEC is under increasing pressure to give such a product the green light, specifically because the commission has already granted approval for futures-based bitcoin ETFs and futures-based ETFs. in leverage.
The reasoning behind these approvals is that futures prices come from regulated exchanges like the CME.
However, the SEC remains hesitant about spot Bitcoin ETFs due to concerns about regulating spot exchanges as coin base and the potential for price manipulation, according to analysts led by Gautam Chhugani.
Despite receiving numerous requests, the SEC has yet to approve a spot Bitcoin ETF.
Last month, asset management company black rock filed documents for a spot Bitcoin ETF, prompting other players like investment and Tree of Knowledge to do the same or reapply for your own Bitcoin ETF products.
He Chicago Board Options Exchange (CBOE) also filed an offer with the SEC on behalf of Fidelity for a spot Bitcoin ETF.
However, the filings were returned by the SEC due to their lack of clarity and comprehensiveness.
SEC Faces Grayscale’s Offer to Convert GBTC to ETF
A notable development in this area is Grayscale’s offer to convert its Grayscale Bitcoin Trust (GBTC) in an ETF, which is currently awaiting a decision by an appeals court.
Bernstein analysts said the court seemed skeptical of the argument that futures prices are not derived from spot prices.
“The court did not appear convinced that the futures price is not derived from the spot price and therefore allowing a futures-based ETF and not allowing spot sounds like a hard pill for courts to swallow,” they wrote. the analysts.
In response to regulatory concerns, the industry has proposed a watchdog agreement between spot exchange operators and regulated exchanges like Nasdaq.
This agreement would provide necessary oversight and monitoring, addressing SEC concerns about manipulation in the Bitcoin spot markets.
The absence of a spot Bitcoin ETF has led to the growth of over-the-counter (OTC) products like Grayscale’s Bitcoin Trust (GBTC).
Bernstein noted that these OTC products are more expensive, illiquid, and inefficient compared to ETFs.
In fact, GBTC has been trading at around a 40% discount to net asset value for years, prompting Grayscale to seek SEC approval for a Bitcoin ETF.
Grayscale has argued that the spot price of Bitcoin in both spot and futures ETFs is subject to the same risks, so there is no point in endorsing one product and not the other.
All in all, Bernstein believes that the SEC’s stance on spot Bitcoin ETFs may change soon.
With increasing interest from asset managers and the proposed industry watchdog deal, there is a high probability that the US will approve a spot Bitcoin ETF in the near future.
“The SEC would rather bring in a regulated bitcoin ETF led by more Wall Street participants and with oversight of existing regulated exchanges, than have to deal with a grayscale OTC product that fills the institutional gap,” the report says.
