Despite receiving a multitude of applications, the SEC has yet to approve a spot Bitcoin ETF.

The analysts also pointed out Grayscale's ongoing effort to transform its Grayscale Bitcoin Trust (OTC:GBTC) into an ETF, which is currently under consideration by an appeals court.

They noted that the court seemed unconvinced that the futures price is not influenced by the spot price, making it difficult to justify the approval of a futures-based ETF while denying a spot ETF.

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The report also mentioned a proposal from the industry for a surveillance agreement between the spot exchange operator and a regulated exchange like Nasdaq.

The absence of a Bitcoin spot ETF has led to the proliferation of over-the-counter products like the GBTC, which Bernstein describes as more costly, less liquid, and less efficient. 

The report concluded by suggesting that the SEC would prefer to introduce a regulated Bitcoin ETF led by mainstream Wall Street participants and monitored by existing regulated exchanges, rather than dealing with an over-the-counter product like Grayscale's that fills the institutional gap.

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