Following the denial of Grayscale’s request to convert its Grayscale Bitcoin Trust (GBTC) into a Bitcoin (BTC) exchange-traded fund (ETF), the company launched a legal challenge against the United States Securities and Exchange Commission. Following these events, the community responded with various reactions, from accusing the SEC of price manipulation to suggesting different solutions.
Redditor u/ThatsMRcurmudgeon2u, posing as a securities attorney, weighed in on the matter. According to the Redditor, many anticipated the lawsuit, as SEC Chairman Gary Gensler has made it clear that he wants exchanges to register with the SEC. The redditor also accused the SEC of “holding GBTC hostage.”
Attorney Jake Chervinsky tweeted that the ETF’s denial was “deeply disappointing” and defies federal law and common sense. He noted that the role of the SEC should be to protect investors and argued that an ETF is a better product for them.
According to Twitter user Ann, given that the SEC approved an ETF that shorts Bitcoin, it may be working to “suppress the price of Bitcoin”. Ann plot that this is not the role of the SEC.
“On the other hand, Bitcoin advocate and author Vijay Boyapati suggested a different route. Boyapati said a better move would be to “liquidate the fund” and return the bitcoins to investors. The author criticized Grayscale’s 2% fees and urged the company to “do the right thing”.
A much better solution would be to wind down the fund and return the underlying #bitcoin to investors, who are currently being milked for an outrageous 2% per year. Do the right thing, Grayscale.
— Vijay Boyapati (@real_vijay) June 30, 2022
A much better solution would be to liquidate the fund and return the underlying #bitcoin to investors, who are currently being squeezed for an outrageous 2% per year. Do the right thing, Grayscale.
Redditor u/Percyheckendorf argued that the SEC’s decision to deny the ETF is bad for retirees, as pension funds will be “stuck buying stocks,” which don’t have as much potential as Bitcoin.
In a letter to investors on Monday, Grayscale announced that the SEC received 11,400 letters related to the proposed Bitcoin ETF. According to the firm, 99% of the letters were in support of the ETF. Despite these letters of support, it was still not approved.
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