Grayscale’s ETF Appeal Hearing Sheds Light on SEC’s Decision-Making

What is an ETF?

• Exchange Traded Funds (ETFs) are a type of Exchange Traded Product (ETP) that trade on exchanges and typically follow a specific index.
• Bitcoin ETFs are collections of assets related to Bitcoin traded as ETFs on traditional exchanges by brokerages.
• The SEC has approved Bitcoin ETFs connected to Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME).

Key Takeaways about Bitcoin ETFs

• Bitcoin futures ETFs are legal, spot ETFs are not.
• Bitcoin ETFs allow more people to invest in Bitcoin without the expenses and hassles of buying it.
• An ETF removes the risks of storing keys as well as other security measures, while also offering a familiar investment format.

Grayscale’s Hearing Sheds Light on SEC Decision-Making Process

During the first appeal hearing for Grayscale’s spot-based exchange-traded fund (ETF), judges raised concerns about the SEC’s reasoning, stating that the SEC had not sufficiently explained why Grayscale’s arguments were flawed. Furthermore, they questioned why a futures-based fund was possible but not a spot based one.

Significance of Receiving Shares in Trust Compared to Real Time Trading

The significance of investors receiving shares in trust compared to real time trading lies in its benefits towards reducing risk and diversifying portfolios. By investing in an ETF, investors can access bundles of assets which can be bought and sold during market hours instead of relying solely on direct investments which may be difficult or volatile from time to time.


While the outcome of Grayscale’s appeal hearing is yet to be seen, it has shed light onto how the SEC’s decision making process works when it comes approving cryptocurrency exchange-traded funds such as those related to bitcoin investments.

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