August 30, 2023
In a significant development in the world of cryptocurrency investment, the D.C. Circuit Court of Appeals has ruled that the U.S. Securities and Exchange Commission (SEC) must reconsider its rejection of Grayscale Investments’ proposed Bitcoin exchange-traded fund (ETF). While this ruling marks a victory for Grayscale, it does not guarantee the immediate approval of a spot Bitcoin ETF.
The SEC has long been reluctant to approve a spot Bitcoin ETF, citing concerns about market manipulation and investor protection. This decision challenges the SEC’s stance, potentially paving the way for future approvals. Influential figures like BlackRock’s CEO Larry Fink have also advocated for a spot Bitcoin ETF, intensifying the pressure on the SEC.
🚨 JUST IN 🚨
The D.C. Circuit ruled in favor of @Grayscale in our lawsuit challenging the SEC's decision to deny $GBTC's conversion to an ETF!
Thank you to everyone who has been on this journey with us, especially our investors. We are grateful for your support and…
— Sonnenshein (@Sonnenshein) August 29, 2023
However, the SEC still has options. It could appeal the ruling, reject the filing again while addressing court-raised concerns, or even reconsider its approach to Bitcoin futures ETFs. Nevertheless, the path of least resistance now appears to be approving spot Bitcoin ETFs.
This legal battle began with Grayscale’s lawsuit, arguing that its proposed Bitcoin ETF closely resembled previously approved Bitcoin futures ETFs. The court did not rule on whether the U.S. public deserves a spot Bitcoin ETF but rather focused on the SEC’s inconsistency in applying its market test.
The court’s decision forces the SEC to review Grayscale’s proposal again, demanding clearer explanations for the differences in exposure to manipulation and the application of the significant market test.
This ruling has brought hope to GBTC investors and the broader crypto community, as it increases the likelihood of a spot Bitcoin ETF in the future, potentially offering better tracking of Bitcoin prices and more accessible investment opportunities.
