Cryptography experts expect a bitcoin spot ETF to arrive as early as this year.
Optimism follows the approval by the Securities and Exchange Commission of an application for the Teucrium Bitcoin Futures ETF earlier this month. The fund was introduced under the Securities Act of 1933, rather than the Investment Companies Act of 1940, which has been used by other bitcoin futures funds such as Grayscale’s Bitcoin Futures ETF.
“From the SEC’s perspective, there were several safeguards that law enforcement products 40 have that 33 products do not, but those safeguards never addressed the SEC’s concerns about the underlying bitcoin market and the potential for fraud or manipulation. “, Michael, CEO of Grayscale Investments. Sonnenshein told CNBC’s “ETF Edge” last week.
“So the fact that they have now evolved their thinking and passed a product of Law 33 with Teucrium really invalidates that argument and speaks of the connection between bitcoin futures and the underlying bitcoin markets that give contracts their value in the last resort. ”
Some of the protections include an independent board of directors, accounting and custody rules, he added.
“Actually, in our opinion, it’s a matter of when and not if” there is a bitcoin spot ETF, Sonnenshein said. “If the SEC is unable to consider two similar issues, the Futures ETF and the Cash ETF, from the same lens, this is, in fact, a potential ground for violation of the Administrative Procedure Act. »
Grayscale is awaiting a response from the SEC in early July on a decision that would turn its Grayscale Bitcoin Trust into a bitcoin ETF. If denied, Sonnenshein hinted that he could sue the agency.
While the CEO of Grayscale has been one of the SEC’s most vocal critics, he’s not the only one.
The SEC opposes manipulation issues, but its specific request was to show that regulated CME markets are large in size, Matt Hougan of Bitwise Asset Management said in the same interview.
“Bitcoin is now an institutional market. It is a market with institutional service providers, institutional investors, a large and robust regulated futures market,” added Hougan, the company’s chief information officer.
“We have the Bitcoins Futures ETF under Law 40. We have the Bitcoin Futures ETF under Law 33. The next step is what people really want, which is a one-time bitcoin ETF that offers a pure bitcoin exposure, “he said.
Tom Lydon, CEO of ETF Trends, notes that a growing number of financial advisors are interested in investing in a bitcoin ETF.
A 2022 Bitwise / ETF Trend Survey found that 82% of advisors prefer a one-time bitcoin ETF to a futures-based alternative. Demand has also risen for bitcoin products that investors can buy on traditional brokerage platforms, Lydon said on the same panel. There isn’t much choice right now, so don’t back down, he added.
The SEC declined to comment.