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Bitwise believes there is currently”no path forward” for a spot Bitcoin ETF with the SEC. Thus the company does not have an application with the regulator at this time, the company’s CIO Matthew Hougan told Pensions & Investments.
Hougan stated that the company intends to launch a spot Bitcoin ETF if regulatory conditions improve. He stated that:
“Spot bitcoin ETFs operate successfully in many markets around the globe, and we think we will eventually see them here in the U.S.”
SEC strongly opposed
Despite having approved multiple futures Bitcoin ETFs, the SEC is determined not to approve a spot Bitcoin exchange traded fund.
Grayscale, a company that wants to launch spot Bitcoin ETFs, believes that the regulator should approve them. It has previously approved futures-based ETFs and both are based upon the price of Bitcoin.
SEC claims the futures market is under strict surveillance and that any manipulation or tampering can be quickly detected. The regulator claims that spot prices are not subject to this oversight as they cannot detect manipulation.
A regulator further claims that the applications for spot ETFs by companies have not shown causation between the futures and spot Bitcoin markets.
Grayscale is currently embroiled in a legal battle with the SEC over the regulator’s rejection of its spot Bitcoin ETF application. The first hearing occurred on March 7, and judges questioned the logic behind the SEC’s stance and asked the regulator’s lawyer to clarify how companies could satisfy its requirements.
Grayscale expects the case will conclude in the third quarter.
Shifting goalposts
Many in the crypto-industry believe the SEC treats spot Bitcoin eTFs differently than other commodity-based eTFs. They believe that the current version is unlikely to approve any spot ETF linked to Bitcoin.
The sentiment was echoed recently by SEC commissioners Hester Peirce and Mark Uyeda.
The commissioners stated on March 10 that confirmed there were no applications in process for a spot Bitcoin ETF with the regulator as companies believe the SEC will not approve a spot ETF until it has “regulatory authority over spot Bitcoin markets.”
According to the statement:
“The commission is using a different set of goalposts from those it used — and still uses — for other types of commodity-based ETPs to keep these spot bitcoin ETPs off the exchanges we regulate.”
They stated that the SEC’s current stance could adversely affect growth and innovation in the sector and called for a revised approach to ensure the U.S. is not left behind.