In a letter to SEC Chair Gary Gensler, a pair of U.S. Congressmen argued for the regulator to approve a Bitcoin spot ETF.

In the letter, Congressmen Tom Emmer and Darren Soto question why the financial regulator is comfortable approving a derivatives-based bitcoin ETF but not a bitcoin spot ETF. Being directly based on the asset, they argue that bitcoin spot ETFs offer investors more protection than ones based on derivatives. Additionally, the approved ETFs could impose substantially higher fees on investors due the premium on Bitcoin futures and rolling the contracts each month, they added.

The letter then addressed the SEC’s perceived concerns about approving either a Bitcoin spot or futures ETF, citing the potential for fraud and manipulation in the Bitcoin markets. Because this concern would have to apply to both spot-based and futures-based ETFs, the Congressmen argue that approval of the futures ETFs implies that the regulator’s issues have been allayed.

“Since the SEC no longer has concerns with Bitcoin futures ETFs (given trading has begun for these products), then it presumably has changed its view about the underlying spot Bitcoin market,” the letter states.

The letter concluded that other spot Bitcoin investment products have proven popular with investors, having amassed $40 billion in assets under management. The Congressmen also point out that some of the products currently trading on OTC markets subject themselves to the same reporting standards as ETFs. 

Unfortunately, they note that “because these products have been unable to register as ETFs with the SEC, public trading typically occurs at a value that is not equivalent to net asset value, and in fact, these products have recently been trading at steep discounts to their net asset value.” They concluded, saying that allowing these discounts went “against the SEC’s core mission of protecting investors.”

After months of anticipation, the SEC finally approved the first Bitcoin-based ETFs last month. The ProShares Bitcoin Strategy ETF (BITO) debuted strong, nearly reaching the limit on its number of contracts. However, the addition of Valkyrie’s Bitcoin Strategy ETF (BTF) seemed to cool off the initial enthusiasm.

Although the approval of these ETFs has fueled speculation of the SEC’s pending approval of Bitcoin spot ETFs, investor may have to keep waiting. Earlier this week, the SEC once again extended the deadline for its approval of Valkyrie’s Bitcoin Fund.

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The post Pair of U.S. Congressmen Advocate for Bitcoin Spot ETF in Letter to SEC Chair appeared first on BeInCrypto.

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