Tuesday, June 18, 2024
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SEC shows concern about liquidity and transparency of Bitcoin ETF Trust

The US Securities and Exchange Commission (SEC) has postponed a decision on Grayscale’s proposal for a Bitcoin (BTC) exchange-traded fund (ETF) yet again, citing concerns about manipulation, liquidity, and transparency.

The SEC highlighted reservations about the digital asset manager’s plan to transform its Grayscale Bitcoin Trust (GBTC) into a spot ETF in a notice released Friday afternoon. It also encouraged the public to weigh in on these matters, giving interested parties 21 days to submit written responses.

Even on Tuesday, SEC also expressed concerns on the Bitwise Bitcoin ETP Trust’s liquidity and transparency. It asked Bitwise for further information on bitcoin’s “suitability” as the fund’s underlying asset.

Grayscale first applied to the SEC in October to convert GBTC shares into a spot Bitcoin ETF, as Cointelegraph previously reported.

With $36.5 billion in assets under management as of February 4, Grayscale is the world’s largest digital asset manager. Over 71 percent of its total assets are held in the GBTC product. The SEC has been significantly more open to a futures-linked Bitcoin ETF than a spot Bitcoin ETF. The ProShares Bitcoin Strategy ETF was approved as the first Bitcoin futures fund in the United States in October. Soon thereafter, the SEC authorised Valkyrie and VanEck’s Bitcoin-linked Strategy ETFs.

The Securities and Exchange Commission is seeking public input once more on whether a spot Bitcoin ETF poses a significant risk to investors.


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