Grayscale Bitcoin ETF proposal sees support from the public

• The US Securities and Exchange Commission (SEC) made a provision for comments from the people on the subject of Grayscale converting its BTC Trust into a spot ETF
• The financial watchdog has in the past publicly shown inclination towards indirect crypto ETFs as opposed to spot ETFs

Earlier this month, the SEC shared its concerns on the Grayscale Bitcoin Trust exchange-traded fund (ETF) conversion proposal – mostly revolving around manipulation, fraud and investor protection.

The commission also expressed its uncertainty over the propriety of Bitcoin as the underlying asset, asking the public to give its views on the same. The agency set a 21-day window for providing the comments and 14 days for replies to the shared view.

The US markets regulator has since received many comments regarding the same. So far, more than 70 comments have been submitted on the SEC filing this month.

The majority hold a view different from the SEC

A closer look at the feedback on this proposed rule change shows that many can't wait for the first spot ETF to be approved. This support is an indication of the public's growing appetite for such a product in the US market. None of the firms that have applied for a spot-based ETF has received a green light from the market's watchdog.

Bloomberg's ETF analyst Eric Balchunas shared a tweet late yesterday pointing out that after perusing through the comment section, he confirmed that the majority favoured the proposal being approved.

"Just glancing through the many comments from ppl to the SEC […] and 95% are in favor of it and most using real names and pointing to the stupefying fact that futures ETF ok but spot not."

Balchunas shared snippets of some of the comments, noting that most people believe the commission is serving the interest of the rich at the expense of the rest.

One user also brought to the fore the fact that the stock market is equally volatile and susceptible to manipulation, yet the SEC cites volatility among reasons for not giving approval.

"AMC ($9 to $72.62 to $13.40) is okay, but bitcoin ETF is not. Gamestop ($17 to $483 to $38) is okay, but bitcoin ETF is not. Tilray ($7 to $66 to $6) is okay, but bitcoin ETF is not. Beyond Meat ($46 to $239 to $48) is okay, but bitcoin ETF is not. Something is not right here. Do your job."

Another notable comment, albeit one made last year, was from Coinbase exchange. The crypto trading platform wrote in favour of the conversion despite standing at a loss if a decision to approve is made.

It hardly comes as a surprise that many in the US are pushing for approval of spot-based products even though the SEC has previously shown a preference for futures-based exchange-traded products.