SEC Delayed Decision on Grayscale's Bitcoin ETF Request Once Again

The United States Securities and Exchange Commission has once again delayed its decision on whether to approve Grayscale's application for a Bitcoin (BTC) exchange-traded fund, citing familiar concerns over manipulation, liquidity, and transparency. In a statement released Friday afternoon, the SEC expressed concern over how the digital asset manager plans to convert the Grayscale Bitcoin Trust (GBTC) into a spot ETF. So the commission is not convinced that Grayscale's proposal is designed to prevent alleged fraud and manipulation in the Bitcoin market. The Commission invited the public to comment on these issues, giving interested parties 21 days to respond in writing. Grayscale's first application to convert GBTC shares into a spot Bitcoin ETF was filed in October. Less than two months later, the securities and exchange commission announced that it was delaying its decision on Grayscale's application and a similar proposal put forward by Bitwise. Grayscale is the world's largest digital asset manager, with $36.5 billion in assets under management as of February 4. The GBTC product accounts for over 71% of its total assets. While the commission was hesitant to approve a spot Bitcoin ETF, the regulator has been much more open to a futures-linked product. In October, the ProShares Bitcoin Strategy ETF became the first Bitcoin futures fund approved in the United States. Shortly after, the SEC approved the Bitcoin-linked Strategy ETF requested by Valkyrie and VanEck.