Grayscale fails to get approval for its Bitcoin ETF

The US Securities and Exchange Commission (SEC) has once again postponed the approval of a Bitcoin exchange-traded fund (ETF). The regulatory body has delayed its decision on the Grayscale Bitcoin ETF, saying that these products are subject to manipulation.

Grayscale is the largest digital asset management firm in the world. The firm has around $35.5 billion in assets under management.

SEC expresses concerns about Grayscale’s Bitcoin ETF

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The SEC released a notice on Friday expressing concerns about the Grayscale Bitcoin ETF. The application filed by Grayscale in October noted that the asset manager wanted to convert its Bitcoin Trust into a spot ETF.

However, the SEC noted that Grayscale failed to convince the regulatory body that having a Bitcoin ETF would protect investors from fraud and manipulation in the crypto market. The SEC has also invited the public to comment on how spot Bitcoin ETFs can present risks to investors. Those interested in providing feedback have 21 days to give a written response.

This is the second time that the SEC is delaying its decision on a Grayscale Bitcoin ETF. a similar proposal has also been filed by Bitwise. So far, the SEC has not approved any spot Bitcoin ETF. In October, the regulatory body approved a Bitcoin futures ETF, stating that this product offered better investor protection.

Grayscale and Bloomberg launch an ETF

This week, Grayscale listed its first equity ETF in conjunction with Bloomberg. The ETF will track the price of the Bloomberg Future of Finance index. The ETF will track some of the largest players in the digital economy, including PayPal, Coinbase. Bloomberg launched this index in January.

The fund debuted trading on Wednesday under the ticker GFOF. It will be administered by the US Bank and distributed by Foreside Fund Services. By launching this equity ETF, Grayscale is diversifying from the cryptocurrency space to the mainstream financial market. Investors in this ETF will have exposure to crypto and traditional financial offerings.

In the announcement, Grayscale noted that this ETF will allow investors to gain access to a new pool of capital while lowering the high cost of financial intermediaries.