Last year, when the United States Securities and Exchange Commission granted approval to a couple of exchange-traded funds with Bitcoin futures as their underlying assets, market analysts wondered if the time was right for other cryptocurrency ETFs to gain approval and start trading on Wall Street. While the SEC rejected filings to first-round Bitcoin ETFs in August 2021, the regulatory body has been very active in other important crypto-related matters.

The SEC made clear that an ETF based on BTC futures is considerably different from a "pure" Bitcoin ETF. In the case of Grayscale, the investment banking firm already has a Bitcoin trust with millions under management, but SEC regulators need more time to think about their next move. A ruling on the application filed by Grayscale has been delayed pending a period of public commentary.

On the first Friday of February, the SEC decided to punt on an approval or rejection, thus putting a brief halt on a Bitcoin rally that pushed the token past $41,600. According to the notice filed by the SEC, there are no new concerns at this time; the problem is still the same as it has been ever since the first round of Bitcoin ETF application: Market volatility and a high potential for manipulation.

The SEC is also looking to make sure that the Grayscale Bitcoin Trust is not simply a marketing tool that could create an unnecessary conflict of interest. It should be noted that the hedge fund does not focus solely on BTC. The company also invests in Litecoin, Zcash, Ethereum, Bitcoin Cash, and even the Basic Attention Token; the latter utility token can hardly be considered to be an investment-grade digital currency, but Grayscale recognizes that it could have a major impact on the future of internet marketing and advertising.

The market analyst team at eToro has been monitoring the progress of Grayscale's Bitcoin ETF filing, and their expectations are still optimistic. Although the SEC still seems to be hesitating on granting an approval for Grayscale's Bitcoin ETF, there are a lot of positive factors that indicate that the SEC could be about to grant approval for the first-time. For instance, even though Bitcoin lost the lion's share of the last bull run, the volume of transactions made by BTC futures is much higher than it was last year. Therefore, the underlying asset is probably going to experience an even more volatile market, and such market conditions are in favor of a Bitcoin ETF.