VanEck filed for another spot Bitcoin ETF days after the Grayscale ETF application was rejected so let’s have a closer look At our latest Bitcoin news.
Investment company VanEck filed for another spot BTC ETF with the SEC hoping that the ETF will allow more traditional investors that are uncomfortable managing crypto directly, to gain exposure to the asset. The last year, the SEC rejected VanEck’s previous BTC ETF application because of concerns around fraud and manipulation of the spot market. The SEC approved futures-based ETFs and rejected the spot market BTC applications that landed on its desk.
A spot market BTC ETF provides more exposure to Bitcoin while the futures-based BTCETF is based on the futures contract. The futures-based ETFs are more expensive often than their spot market counterparts. The SEC rejected Grayscale’s Bitcoin ETF application after eight months of prolonged delay and after the decision, grayscale moved to court against the SEC. Cathie Woods Ark Invest and Bitwise also faced rejections from the SEC from their BTC ETF applications and right now, the product of the close that the investor shave to an ETF is the Grayscale Bitcoin Trust.
The price of the Grayscale Bitcoin Trust is trading at a discount of 30% to a spot price of BTC while this figure was even higher yesterday. To recover the peg to Bitcoin, Grayscale said the product should be converted into a spot market BTC ETF. This is because GBTC cannot be redeemed for underlying BTC and if it could, the traders would be rushing in to purchase the discounted GBTC and convert it to deal crypto and make a huge profit.
The traditional ETFs are often able to m maintain their peg because they offer redemptions for underlying assets. The SEC commissioner Hester Pierce also showed support for the approval of the spot market BTC ETF:
“It is time for the Commission to stop categorically denying spot crypto exchange-traded products. Spot ETPs have launched in other countries without incident and with great investor interest”
The SEC chairman Gary Gensler thinks otherwise as he opposed the spot market BTC ETF due to market manipulation and consumer protection concerns. Bitcoin on the other hand is up by 0.72% over the past day and trades at $19,151. The number one cryptocurrency lost 72% of its value after reaching a new high of $68,800 back in 2021.
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