“The judges might issue a ruling that says, “You violated the APA. You did not treat situations alike.” And then say, “Go back to the drawing board.” And then the SEC could then just deny for other reasons... So Grayscale might win the case and then still not be able to convert to an ETF.”
— James Seyffart

James Seyffart is an analyst for Bloomberg Intelligence covering ETFs. In this interview, we discuss the how and why of ETFs, Grayscale’s legal battle with the SEC over the approval of a Bitcoin ETF, and the complexities of Grayscale implementing a redemption program for GBTC. We also talk about the role of the SEC in regulating Bitcoin and Gary Gensler’s political ambitions.

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In two months' time, it will be the 10-year anniversary of the Winklevoss Twins making the first submission to the SEC for a Bitcoin spot ETF. When the SEC rejected this in 2017, it seemed as though it was a temporary blip, and that a US Bitcoin spot ETF would inevitably be approved. And yet, the SEC has rejected a raft of subsequent applications, and many more sit in Gary Gensler’s inbox awaiting a decision. 

Grayscale has decided to test the SEC's stance in court. Whilst there are various opinions as to the underlying motivation for Grayscale taking on this case, there is no doubt that this is the best test of the SEC's current intransigence in relation to a Bitcoin spot ETF. 

Bloomberg Intelligence’s James Seyffart, an ETF expert, provides his informed opinion on the current status of Grayscale’s case, the likelihood of the SEC losing the case, and whether this will affect the SEC's position of a Bitcoin spot ETF. He also sets out why the SEC is so reluctant to approve what many in the community believe would open up Bitcoin to a new massive wave of adoption.

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This episode’s sponsors:
Iris Energy - Bitcoin Mining. Done Sustainably
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Ledger - State of the art Bitcoin hardware wallet
Wasabi Wallet - Privacy by default
Unchained - Secure your bitcoin with confidence

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WBD664 - Show Notes

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