The United States crypto regulatory framework does not appear to be bothering Cathie Wood‘s ARK Invest or the European crypto investment company 21Shares. Despite being turned down twice before, the two companies asked the U.S. Securities and Exchange Commission (SEC) to permit the development of a spot Bitcoin exchange-traded fund (ETF).
The SEC turned down the two firms’ initial attempt to create a spot Bitcoin ETF in April 2022. According to the regulator, the product did not meet the criteria for listing a financial instrument. The two organizations submitted a request in May 2022 again, which the SEC again turned down on Jan. 26 of this year.
An ETF gives investors access to a specific asset without having to hold the underlying financial product themselves. A spot without actually owning Bitcoin, investors can still acquire indirect exposure to the digital currency by purchasing shares that follow the price of BTC in real-time.
Will the SEC approve a spot Bitcoin ETF this year?
The SEC has so far denied every application for a spot Bitcoin ETF, claiming challenges with “protecting investors and the public interest” from fraud and manipulation. This is in contrast to the fact that the SEC has approved a number of Bitcoin Futures ETFs, which expose buyers to the potential future value of BTC.
However, a spot BTC ETF might materialize in the United States by the middle of this year, according to ETF researchers at Bloomberg. However, there is no official word on how and when it could happen.
The crypto conglomerate Digital Currency Group (DCG) has filed a lawsuit against the SEC for denying its request to turn its flagship Grayscale Bitcoin Investment Trust (GBTC) into a spot Bitcoin ETF. The litigation is progressing quickly, Grayscale Chief Legal Officer Craig Salm tweeted on Jan. 12. Although the exact date is unknown, oral arguments could happen as soon as Q2, 2023.