Grayscale wins against the SEC in court. The establishment of the first Bitcoin Spot ETF in the USA is now a big step closer. As a result, the crypto market is writing deep green numbers in a very short time.
Wealth manager Grayscale wins in court against the SEC. The judgment of the responsible judges could be an important milestone for the crypto market. It is about establishing the first Bitcoin Spot ETF in the USA.
Grayscale already wanted to convert the Grayscale Bitcoin Trust (GBTC) into an ETF in October 2021. The exchange-traded fund was supposed to become a “huge, gigantic ETF.” Above all, it would have been the first Bitcoin Spot ETF in the USA.
However, the US stock exchange supervisory authority SEC prevented this development. She justified her refusal with too high risks for end users. Manipulation and fraud are too difficult to prevent with such a product.
In June 2022, Grayscale therefore filed a lawsuit. The aim of the litigation is, of course, to convert GBTC into an ETF as planned. Now the subsidiary of the Digital Currency Group has achieved success.
“The District of Columbia has ruled in Grayscale’s favor in our lawsuit challenging the SEC’s decision not to convert GBTC into an ETF,” Grayscale CEO Michael Sonnenshein announced cheerfully on Twitter.
🚨 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…
Grayscale’s argument: The SEC is acting “arbitrarily and erratically” given the fact that it approved the first Bitcoin Futures ETF in October 2021 . The court finds the correlation between spot and futures markets too high to justify a cancellation.
Judge Neomi Rao said the SEC could not have refuted the strong connection. That is why the court ultimately ruled against the supervisory authority.
Will the first Bitcoin Spot ETF follow?
Will the court’s decision be followed by the first Bitcoin Spot ETF in the USA? Bitcoiners in particular are hopeful about this. New inflows of money from institutional investors could significantly increase the Bitcoin price.
However, the court itself did not decide whether Grayscale’s application was admissible. Instead, the judges ruled that the SEC’s rejection should be revoked. The US Securities and Exchange Commission must re-examine the application that Grayscale filed in 2021.
So there is at least a theoretical possibility that Grayscale will become the first provider of a Bitcoin Spot ETF in the USA. However, that is not certain. Since June of this year, there has been a race to establish such a find in the North American country.
The race began with a sudden application by the world’s largest asset manager BlackRock for its own Bitcoin Spot ETF – the iShares Bitcoin Trust. Shortly afterwards, many large companies became free riders – such as WisdomTree, Ark Invest and Fidelity.
That’s why the Bitcoin price is rising so much today
The sudden court ruling has a very positive effect on the crypto market. According to CoinMarketCap, the market’s total value grew by 4.35 percent to $1.10 trillion in the last 24 hours.
The Bitcoin price recorded significant gains, shooting up by 5.35 percent in the daily trend. The largest cryptocurrency is currently trading at around $27,400. Some analysts expect the news to trigger a further increase to as much as $28,000.
There is hope among some investors that it won’t be long before the first Bitcoin Spot ETF. The verdict handed down in Washington DC is being heard as the first indication of this.
Giant financial companies like BlackRock based their interest in such a fund on immense demand from institutional investors. They want to rely on the security of established financial markets in order to invest in the new asset class of cryptocurrencies.
If the crypto market becomes accessible to them via spot ETFs, the influx of enormous amounts of money could be the starting signal for a new bull market – this is the hope of many investors.
“This is a huge step forward for American investors and the Bitcoin ecosystem ,” a Grayscale spokesperson told Blockworks.
GBTC is also rising immensely due to the positive news. In the 24-hour trend, the financial asset recorded a price growth of 17 percent and is now trading for $22.40.
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