Asset managers are relentlessly pursuing the launch of a bitcoin (BTC) exchange-traded fund (ETF) in the United States, while U.S. regulators remain skeptical of bitcoin spot ETFs.
Craig Salm, chief legal officer of asset management firm Grayscale, discusses the firm's lawsuit with the U.S. Securities and Exchange Commission (SEC) over the conversion of the Grayscale Bitcoin Trust (GBTC) into a bitcoin spot ETF.
Salm explained Grayscale's reasons for opposing the SEC while answering the most frequently asked questions about the lawsuit. The legal officer stated that the SEC rejected the Bitcoin spot ETF, separated the futures trading of the Bitcoin ETF from the spot trading, and treated the two differently.
However, Grayscale believes that this difference has nothing to do with the approval of the Bitcoin ETF, because the prices of Bitcoin futures and spot ETFs are based on the same Bitcoin spot market.
Therefore, Grayscale’s legal team believes that not approving a Bitcoin spot ETF while approving a Bitcoin futures ETF can be considered “unfair discrimination.” That violated multiple laws, including the Administrative Procedure Act and the Securities Exchange Act of 1934, Salm said.
After explaining Grayscale's point of view, Salm also answered one of the most frequently asked questions: When will the Bitcoin spot ETF be finally approved?
According to Salm, while the exact timing is uncertain due to a number of factors, he estimates it could take one to two years.
While the lawsuit is likely to drag on for a long time, Salm said Grayscale believes in its arguments and believes the courts will rule in Grayscale's favor.
When Grayscale sued the SEC, community members unanimously supported Grayscale. Many were disappointed by the decision not to approve a spot bitcoin ETF, but to approve an ETF that shorts bitcoin. One Twitter user said the SEC’s move was to “suppress the price of Bitcoin.”