In a bid to shape the future of spot Bitcoin Exchange-Traded Funds (ETFs), Grayscale’s Chief Legal Officer, Craig Salm, emphasizes the need for the Securities and Exchange Commission (SEC) to approve all spot ETF applications simultaneously. Grayscale’s legal team has submitted a persuasive letter regarding the recently filed spot ETFs, arguing against the SEC picking “winners and losers.”

Highlighting the intricate relationship between Bitcoin’s spot and futures markets, Salm argues that the SEC is already positioned to approve spot BTC ETFs based on its previous approval of Bitcoin futures ETFs. He underlines the inextricable link between the spot and futures markets, as demonstrated by independent studies showing a 99% correlation. This correlation indicates that surveillance of the regulated CME Bitcoin futures market could effectively safeguard against potential fraud or manipulation in the spot market.

Grayscale reiterates its commitment to fostering oversight in centralized crypto markets while enabling investors to access the crypto ecosystem. Although the implementation of a Surveillance Sharing Agreement (SSA) with a spot Bitcoin market is not a “silver bullet” for spot ETF approval, Grayscale remains dedicated to meeting regulatory requirements.

Furthermore, Salm insists that the SEC should provide consistent and equitable feedback or guidance to issuers without showing favoritism. Approving all spot ETF applications simultaneously would ensure American investors’ protection and grant them access to diverse Bitcoin investment opportunities.

Grayscale’s Grayscale Bitcoin Trust (GBTC) is a flagship Bitcoin fund holding over $18 billion in assets under management. GBTC has been persistently seeking conversion into a spot ETF. The approval of spot ETFs would provide institutions with a gateway to Bitcoin exposure without directly holding the digital asset, further legitimizing crypto as a recognized asset class.

While a wave of spot Bitcoin ETF applications has flooded the SEC’s desk, the regulator has exercised caution, expressing concerns about potential fraud and manipulation. Prominent firms such as BlackRock, Fidelity, WisdomTree, and Invesco are actively seeking approval, transforming the process into a regulatory challenge.

Addressing Concerns through Surveillance-Sharing Agreements:
To address the SEC’s concerns, some applicants, including BlackRock, have entered into surveillance-sharing agreements with major crypto exchange Coinbase. These agreements are designed to ensure thorough market monitoring and investigation of potential manipulation.

As Grayscale’s Chief Legal Officer, Craig Salm, highlights the interconnectedness between Bitcoin’s spot and futures markets, a compelling case is made for the SEC to approve all spot ETF applications simultaneously. By doing so, the SEC can ensure fair treatment, consistent guidance, and investor protection, supporting the growth and accessibility of the Bitcoin market.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.