TL;DR
- The SEC might not challenge a court decision prompting it to reevaluate Grayscale Investments’ proposal for a spot Bitcoin ETF.
- The value of Bitcoin pumped ~2.5% after Bloomberg and Reuters first reported the news.
Bitcoin Reacted Positively To SEC’s Decision
Bitcoin’s value surged late on Friday following indications that the Securities and Exchange Commission (SEC) wouldn’t challenge an August court decision.
This verdict mandated the SEC to revisit Grayscale Investments’ proposal to transform its leading GBTC fund into a spot Bitcoin ETF.
Bitcoin, the dominant cryptocurrency by market value, appreciated by 1.2%, reaching $27,042 by 5:54 p.m. ET.
Although the SEC can technically submit an appeal until midnight, any action post 5 p.m. ET seems improbable. As of 6:00 p.m. ET, the case’s docket remained unchanged.
Both Reuters and Bloomberg have highlighted that an SEC appeal isn’t anticipated. An insider also confirmed that the SEC isn’t leaning toward an appeal.
While the SEC remained silent on this development, Grayscale chose to withhold comments until after the official deadline.
Earlier that day, when probed by reporters, SEC Chair Gary Gensler refrained from commenting on the potential appeal.
The Industry Is Filled with Hopium
We’re seeing more and more people in the industry feeling hopeful about a possible Spot Bitcoin ETF soon. Still, a few key things need to happen before it can launch.
A decision against an appeal doesn’t automatically imply the SEC’s readiness to sanction one.
“A non-appeal doesn’t guarantee swift approval, and the SEC might still revisit and reject based on other reasons, potentially reigniting this legal battle.”
Jennifer Schulp, Director of Financial Regulation Studies at the Cato Institute.
Last year, Grayscale challenged the SEC’s denial to transition its primary fund, GBTC, into a spot Bitcoin ETF.
During a March debate, Grayscale’s chief counsel, Don Verrilli, argued that the SEC’s stance was inconsistent by permitting bitcoin futures ETFs yet refusing a spot bitcoin ETF.
Recently, Grayscale reached out to the SEC, expressing a desire to deliberate on morphing its Grayscale Bitcoin Trust into a spot Bitcoin ETF.
Encouraging Decisions for Bitcoin and Crypto
While the SEC hasn’t officially approved a spot Bitcoin ETF, Grayscale’s initial ruling is a promising indication for the numerous spot fund applications that have emerged over the past year, notably from industry giants like BlackRock and Franklin Templeton.
The previous month, the regulatory body postponed all ongoing spot Bitcoin ETF applications, introducing an elongated comment timeframe and extending the procedure for at least another month.
However, with all the positive decisions, a spot Bitcoin ETF is highly probable. Do you think the SEC will approve at least one of the existing applications?
Suchet Salvesen
Suchet is a Norwegian economist, entrepreneur, and investor, serving as the CFO and COO of Brainfund. With over a decade of experience in global expansion, venture capital, and emerging technologies, he earned his MBA from the NMBU School of Business & Economics. He held dual bachelor's degrees from the University of South-Eastern Norway. His career spans roles at NextToMe, Get, and Conax before joining Everipedia, now Brainfund, in 2017.
