What Happened: Prior to this announcement, Grayscale and Bitwise have only had futures Bitcoin ETF applications approved. The approval of spot Bitcoin ETFs has been delayed, attributed to security concerns.
Furthermore, the SEC’s (U.S. Securities and Exchange Commission) bapproval deadline for the same is July 6th, 2022. The endeavor for spot ETFs is following the SEC’s approval of Valkyrie’s futures Bitcoin ETF.
At the Coindesk Consensus, David LaValle, Grayscale’s global head of ETFs, said that previously the question was, "if this was going to happen." Adding that “now it’s clearly a question of when it’s going to happen.”
He further reassured Bitcoiners that if the SEC were to reject the spot ETF application, Grayscale would be “very focused on addressing all options.”
Why It's Important: Cryptocurrency as an asset class still remains extremely risky. Its regulatory and legal obscurity merged with extreme market volatility obstructs institutional and retail investors from entering the sector.
A spot ETF presents a comparatively secure, less risky, and more regulated means for investors and traders to hold and trade cryptocurrencies.
Furthermore, spot ETFs facilitate much-needed portfolio diversification for institutions and individuals. The SEC approving a spot ETF would allow much larger capital to flow into the crypto sector, enabling interindustry expansion.