Yeah, I'm with DooMAD here.
1. The only people who're saying it's needed are the people launching these products. I keep saying that the actual institutionals who really want in, have gotten in already, mainly individually or through OTC desks or through PEs. That wave happened in 2016/17. And they've been hedging way longer than we think they have.
2. All these guys keep saying there's demand, and they're getting pressure from clients. But come actual launch days, there's no volume. So clearly, that demand's made up by the very guys creating these products.
The guy from Grayscale made some good points though, there are plenty of people who would like to easily get in. Likewise there are institutions that would like to get in, but don't have an easy vehicle to trade, don't want to be concerned about who in their organization is holding the private keys, and don't want to have to go through the required steps that holding the private keys would require in order to have their holdings insured. Certainly some hedge funds have gotten in, but there are huge markets that will open with an SEC approved product and just because some institutions may be in doesn't mean that many of them are. Look at the premium that GBTC enjoys because it is one of the few ways to easily get in from a brokerage account.
Whether the SEC will have a change of heart this time is unknown, but eventually they will do so. Every time that there is an application to deal with the perceived shortcomings of previous applications it gets one step closer to approval.
It certainly isn't "needed" in the sense that one needs air, but from an investment perspective, there are many organizations that would like to add crypto to a model portfolio but can't do so without a SEC approved product. So from that perspective there is indeed a need. E.g. a Merrill, Vanguard, Fidelity, or Schwab for model portfolios, robo advisors, or opening up the market for retirement accounts (IRAs, 401ks, 403bs etc). Even opening up the market for regular brokerage accounts with a product that doesn't have a huge premium over the bitcoin market price.