While Mr. Hougan does not claim to speak for the market, there is a footnote in a March 10 statement issued by SEC Commissioners Hester M. Peirce and Mark T. Uyeda, who expressed dissent after the commission did not approve a proposal for a spot -bitcoin exchange- traded product called VanEck Bitcoin Trust, suggests he is not alone in his opinion.
“Based on a review of exchange filings on the Commission’s website, it appears that there are no currently active spot bitcoin ETP filings before the Commission,” the footnote said, adding that their absence may reflect “the market’s reasonable conclusion that this the commission will not approve a spot bitcoin ETP, at least not until the SEC has regulatory authority over spot bitcoin markets.”
Despite the bitcoin market’s “significant evolution,” the SEC has continued to reject any application by an exchange to list and trade shares of a spotbitcoin exchange-traded product that has come before it, the statement said.
“In our view, the Commission is using a different set of goalposts than those it used — and still uses — for other types of commodity-based ETPs to keep these spot bitcoin ETPs off the exchanges we regulate,” the two commissioners said.
The commissioner’s statement said it is worth reflecting on the SEC’s approach to detecting bitcoin ETPs “and what this promises for the future of innovation, and by extension, of investor protection and capital formation, in our markets.”
On June 29, the SEC issued separate orders rejecting applications for proposed rule changes filed with it by NYSE Arca to list and trade shares of Bitwise Bitcoin ETP Trust and Grayscale Bitcoin Trust.
Grayscale Investments, sponsor of the Grayscale Bitcoin Trust, is suing the SEC for denying its application to convert the trust into a spot bitcoin ETF. In its opening brief, Grayscale argued that the SEC had arbitrarily treated a proposed spot bitcoin ETP differently from the way it treats bitcoin futures ETPs.
Grayscale, which is common, uses the generic term ETF to describe the proposed product when it would strictly be an ETP. As defined in the SEC’s order regarding the Grayscale Bitcoin Trust, the term ETPs refers to exchange-traded products that register offers and sales of their shares under the Securities Act of 1933, but are not regulated under the Investment Company Act of 1940.
On March 7, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments in the Grayscale case.
“The court asked thoughtful, pointed questions about the inextricable link between bitcoin spot markets and bitcoin futures markets — the precise points that underlie the case for converting GBTC to an ETF,” a Grayscale spokeswoman said in comments after oral arguments. refers to the trust with the ticker symbol. – We look forward to the court’s final decision.
Grayscale has said it expects a decision in the case this autumn.
Bitwise, meanwhile, is continuing to monitor the situation, according to Mr. Hougan, who said that just because there doesn’t appear to be a path forward for a spot bitcoin ETF at the SEC currently doesn’t mean there never will be one.
“Spot bitcoin ETFs are operating successfully in many markets around the world, and we believe we will eventually see them here in the United States,” he said.
The SEC did not respond to an emailed request for comment on Wednesday.
