SEC rejects Grayscale Bitcoin ETF application [pdf]
This is a spot versus future ETF issue.When applying for an ETF you have to prove that the underlying cannot be easily manipulated, and is evolving in a fair market.The current ETFs are based on BTC futures from CME, which is a high quality, regulated, futures exchange.The SEC is basically saying that the spot BTC market cannot be trusted, is not regulated enough, subject to potential manipulation (as defined by Grayscale of what is BTC spot market).There are points to be made for the SEC's arguments, depending on what Grayscale defines as being "BTC spot". I did not read their application but I can guess they would have to prove the spot market reference price (the ETF index) is a somewhat aggregated value based on multiple markets avg(binance, uniswap, sushiswap, coin base, ...) and failed to convince it could be trusted. Considering most of these markets are beyond SEC's reach, it sort of makes sense.There are also arguments in favor of Grayscale, mainly because the future price is based on the spot price, so a manipulation on the latter would reflect on the former.