A bitcoin-spot exchange traded fund may not be in the cards for investors any time soon, VanEck CEO Jan van Eck alluded to last week.
During the Bitcoin 2023 conference in Miami last week, Van Eck was asked what the likelihood of a spot bitcoin ETF in the US.
His response was “no chance.”
Firms have been vying for a spot bitcoin ETF for years to no avail.
Grayscale, the world’s largest digital asset manager, has tried to convert one of its funds, GBTC, into a spot bitcoin ETF, which was rejected by the US Securities and Exchange Commission.
The company then filed a lawsuit over the decision, which is currently playing out in a Washington DC court with a final decision expected later this year.
“Even if the SEC loses a Grayscale litigation, they’ll just drag their feet, appeal” Van Eck said. “So I just don’t see that in the next year and a half.”
A long history
The SEC has not ever approved of a spot bitcoin ETF, citing concerns over fraud and manipulation in previous rejections.
The regulator rejected a proposal in March to list and trade shares of the VanEck Bitcoin Trust, which was a spot bitcoin ETF.
Rejections also go back to July 2016 when the SEC disapproved of a proposal from Cameron and Tyler Winklevoss to list and trade shares of the Winklevoss bitcoin trust.
The agency did approve of several bitcoin futures ETFs when it first allowed the trading of the ProShares Bitcoin Strategy ETF in October 2021.
Meanwhile, Grayscale has argued that the spot price of bitcoin in both spot and futures ETFs is subject to the same risks, and so it does not make sense to approve one product and not the other.
The SEC has said that its disapproval of Grayscale’s spot ETF “was reasonable, reasonably explained, supported by substantial evidence, and faithful to the text of the Exchange Act.”
The agency said spot bitcoin ETFs and bitcoin futures ETFs were different given that the spot market is “fragmented and unregulated” compared to futures which trade on the Chicago Mercantile Exchange, which is regulated.
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