Approval of New Bitcoin Futures ETF Offers New Hope for Bitcoin Spot ETF – BTC Direct

The US Securities and Exchange Commission (SEC) has authorized NYSE Arca and Teucrium to trade a bitcoin futures ETF. The SEC announced the approval on its website on Wednesday. By itself, this is not very exciting news, were it not for the fact that the SEC approved this bitcoin futures ETF for new reasons.

Teucrium and Arca filed under the Securities Exchange Act of 1933 using a 19b-4 form. Pre-approved bitcoin futures ETFs are filed under the Investment Company Act of 1940 (ICA ’40). This is interesting because approval through the Securities Exchange Act of 1933 (SEA ’33) opens the doors for approval of a bitcoin spot ETF. Something also noted by Grayscale CEO Michael Sonnenshein.

Sonnenshein sees opportunities

To date, all bitcoin futures ETFs have been approved under ICA ’40, ensuring a higher degree of investor protection, according to the SEC. The SEC said last week that the difference between the ICA ’40 and the SEA ’33 is a reason to reject bitcoin spot ETFs. All of these have been submitted under SEA ’33.

With the approval of the Teucrium bitcoin futures ETF under SEA ’33, that argument has been considerably weakened. Sonnenshein hopes that Grayscale’s desire to turn Grayscale Bitcoin Trust (GBTC) into an ETF is much closer. According to Sonnenshein, it’s hard to argue that investor protection under SEA ’33 is too weak for the bitcoin market.

Additionally, the SEC has indicated in the past that the lack of a significant market relative to the underlying asset was a critical missing element for approval of a bitcoin spot ETF. With the approval of the Teucrium ETF, the SEC now seems to admit that the bitcoin market is big enough.

GBTC deadline for the SEC on July 6

The US financial regulator has three months to respond to Grayscale’s request. However, it seems to be getting harder every day to justify a rejection. Sonnenshein previously indicated that he would not rule out a lawsuit if Grayscale’s application failed again.

“I think all options are on the table in July.” Grayscale CEO Michael Sonnenshein said in an interview with Bloomberg News in the last week of March. Grayscale has asked investors to speak up. That call has been heeded en masse because the SEC has received approximately 2,700 letters regarding Grayscale’s application.

Grayscale needs GBTC ETF

According to Sonnenshein, every day GBTC is not listed, as an ETF hurts investors. The absence of bitcoin spot ETFs forces traders to use bitcoin futures ETFs which are much less secure. Sonnenshein also refers to the ‘discount’ at which GBTC is currently trading.

The market value of GBTC shares is much lower than the value based on the bitcoin they represent. The idea is that converting GBTC to a bitcoin spot ETF will bring its value back to par. So for now, count down to July 6, when Grayscale has more clarity on its application.

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