On Wednesday, the SEC denied an application for Grayscale to convert its Bitcoin Trust into a spot ETF – an exchange-traded fund that tracks the price of Bitcoin and gives buyers direct access to Bitcoin ownership. The rejection further muddies an already unclear regulatory environment for cryptocurrency, sending mixed signals following the recent approval of Bitcoin futures ETFs. The SEC decision also dismisses supportive comments from consumers and industry leaders on Grayscale’s application.

“There’s no good reason why the SEC rejected Grayscale’s application after previously approving similar applications,” said Chamber of Progress CEO Adam Kovacevich. “Chairman Gensler has been talking for months about the need for greater regulation of crypto, and this was a missed opportunity for the SEC to expand its regulatory authority over digital assets. The SEC’s strategy of regulating crypto through one-off decisions and lawsuits is harming crypto holders, investors, and innovators.”

Spot Bitcoin ETFs are already trading in Canada, Australia, Singapore, and Brazil. As the US positions itself as a global leader in the crypto industry, the SEC’s rejection of Grayscale’s application puts the US in danger of being left behind. 

Millennials are increasingly investing in Bitcoin through IRAs and other retirement accounts. For the average investor, a spot Bitcoin ETF has the potential to serve as a low-risk, cost-effective on-ramp into the burgeoning crypto industry.

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Chamber of Progress (progresschamber.org) is a center-left tech industry policy coalition promoting technology’s progressive future. We work to ensure that all Americans benefit from technological leaps, and that the tech industry operates responsibly and fairly.

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