On Aug. 28, the U.S. Court of Appeals for the DC Circuit ruled in favor of Grayscale in a lawsuit against the SEC’s rejection of Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF).
The court noted that the securities agency failed to provide sufficient evidence to support its decision and requested the SEC to review Grayscale’s filing.
With the SEC missing the deadline to appeal – are we close to Bitcoin ETF approval?
The landmark ruling put pressure on the SEC. While the agency had the option to appeal the court’s decision, some experts argued that the SEC would be unlikely to win an appeal. But regardless, the SEC is moving slowly.
The SEC is Dragging it Out
Last Friday (Oct. 13) was the deadline for the SEC to lodge an appeal against the court decision regarding Grayscale Bitcoin Spot ETF. However, the agency chose to pass the option. Many crypto members believe it is a sign that the SEC is becoming more willing to approve spot Bitcoin ETFs in the future.
Grayscale also issued a statement regarding the SEC’s decision not to seek a rehearing. “The Grayscale team remains operationally ready to convert GBTC to an ETF upon the SEC’s approval, and we look forward to sharing more information as soon as practicable.”
The agency must now assess Grayscale’s proposal, but approval by the SEC is not guaranteed. If regulators choose to reject the proposal again, they must provide substantial and clear reasons.
The court cautioned the SEC against vague rejections based on concerns of market manipulation, especially since the SEC has already approved a Bitcoin futures ETF linked to the spot market. Furthermore, the court highlighted that concerns about inadequate control over trading activities, a previously cited reason for rejection, are no longer valid.
According to some experts, the market could expect more delays regarding the approval of a Bitcoin spot ETF. The SEC is currently reviewing proposals from major institutional players including BlackRock, Fidelity, Valkyrie, WisdomTree, VanEck, Invesco, and Ark Invest.
However, the SEC can only delay its decision for a limited amount of time. With the SEC’s decision not to appeal, Bloomberg analysts Balchunas and Seyffart believe there is a 90% chance of the Bitcoin Spot ETF being approved before the January 10 deadline of Ark Invest’s proposal.
The regulators have only approved Bitcoin and Ethereum futures ETFs and remained skeptical about the crypto Spot ETF. If accepted, the Bitcoin Spot ETF could lead to a significant influx of capital into the market.
There is no doubt that crypto ETFs would be popular, and the SEC seems to be opposed to them hitting the markets.
BTC Jumps 3% in Face of Gloomy Economic Forecast
Data shows that Grayscale Bitcoin Trust ($GBTC) almost hit its two-year low. The discount has shrunk to 15.87% as of October 13. The reason for this reduction in the discount is likely the growing expectation that traditional exchange-traded funds (ETFs) linked directly to Bitcoin’s spot price will gain approval in the U.S
Meanwhile, Bitcoin (BTC) moved sideways during the last week despite bullish momentum from the SEC’s decision. The price of Bitcoin surprisingly soared 3% on Monday amid economic fears. At the time of writing, the largest cryptocurrency is trading at $27,724.
Ferrari, the Italian luxury sports car manufacturer, has recently added Bitcoin, Ethereum (ETC), and USD Coin (USDC) to its methods of payment in the U.S. The automaker plans to explain the method in other markets where regulations on crypto sales have been established.
Speaking with Reuters, Ferrari’s Commercial and Marketing Director Enrico Galliera said that they are accepting Bitcoin payments in response to customer growing demand. Many of Ferrari’s customers are increasingly interested in cryptocurrencies. Ferrari will partner with BitPay to streamline crypto payments.