(Bloomberg) — The U.S. Securities and Exchange Commission is seeking advice from the public about whether exchange-traded funds directly tied to the price of bitcoin could be a vehicle for fraud, according to submissions from one of the largest trusts. raises concerns. Token.
The regulator issued a notice Friday asking members of the public to submit written comments regarding Grayscale Investments LLC’s application to convert its Grayscale Bitcoin Trust (ticker GBTC) into an ETF tied to the spot price of bitcoin. The SEC took notice a few days ago about another application to launch a bitcoin ETF, submitted by Bitwise.
The notice requested feedback on whether the proposed ETFs would be susceptible to manipulation and fraud, and whether bitcoin could be held to the same standard. The SEC has denied six similar applications since November, including those from VanEck, WisdomTree and SkyBridge Capital.
Since its launch in 2013, Grayscale’s $27 billion fund has been an important way for financial institutions to gain exposure to crypto, which is why it has historically traded at a premium to the real price of bitcoin. However, following the surge in crypto prices and the launch of ETFs backed by crypto derivatives on Wall Street, GBTC now trades at a discount.
Despite recent price volatility, demand for ETFs tied to the spot price of bitcoin may remain high in the near term, analysis by Bloomberg Intelligence showed on Monday. BI’s Rebecca Sinn and James Seifert said trade volume among crypto ETFs remained stable in January, with relatively small inflows declining.
“The GBTC discount has weighed on shareholders for months, but provides bitcoin exposure below market prices,” he said in an earlier note. If the SEC approves Grayscale’s ETF application on July 6, the gap will disappear, however, analysts expect a denial.
