Pointing to discriminatory treatment, Grayscale filed a lawsuit with the U.S. Court of Appeals concerning the disapproval by the SEC of their Bitcoin trust conversion to an ETF."If regulators are comfortable with ETFs that hold derivatives of a given asset, they should logically be comfortable with ETFs that hold that same asset." - Grayscale Letter to Investors.The SEC is setting a higher bar for spot-based ETPs, compared to futures-backed ETPs, by asking them to show a potential manipulator is likely to trade on the CME.Over the past year and a half, the SEC has evolved an increasingly active and antagonistic position toward the crypto space as evidenced by the Ripple lawsuit and Frayer hiring.While highly constructive on Bitcoin in the 20,000 USD range, I am changing my rating on the Grayscale Bitcoin Trust from buy to hold.On Wednesday, the SEC disapproved the Grayscale Bitcoin Trust's (OTC: GBTC) proposed conversion to a spot Bitcoin (BTC-USD) ETF. Restating a prior argument, the Commission said Grayscale and NYSE Arca had not adequately shown the fund is designed to prevent fraudulent and manipulative acts. Specifically, the SEC again focused on the failure to meet technical aspects of a general rule that an exchange traded product has "a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets."The Grayscale disapproval will have a sub...
