Skip to content Skip to sidebar Skip to footer

SEC’s Uncertainty Looms Over Grayscale’s Bitcoin ETF Despite Court Win

Grayscale wins lawsuit against SEC for Bitcoin ETF but may still need to refile its application as court can’t force SEC.

Key Takeaways:

  • Grayscale Investments wins lawsuit against SEC over Bitcoin spot ETF.
  • Court cannot compel SEC to convert Grayscale Bitcoin Trust.
  • Analysts suggest SEC may make Grayscale refile its application.
  • Grayscale’s struggle for a spot Bitcoin ETF continues despite court victory.

Grayscale Investments recently celebrated a legal victory in its battle against the U.S. Securities and Exchange Commission (SEC) regarding its Bitcoin spot exchange-traded fund (ETF) application. However, the outcome of this legal triumph remains uncertain, as it does not guarantee that the SEC will convert the Grayscale Bitcoin Trust (GBTC) into an ETF.

Action Leads To Uncertainty

Despite a federal appeals court’s ruling that the SEC must reconsider Grayscale’s application, Senior ETF analyst at Bloomberg, Eric Balchunas, pointed out that the court lacks the authority to mandate such a conversion. Balchunas emphasized that the SEC still maintains a level of control over the fate of GBTC, which leaves room for ambiguity in Grayscale’s efforts. He speculated that the SEC might employ “legal reasoning” to make Grayscale resubmit its application, potentially leading to further delays.

Scott Johnsson, General Partner and General Counsel at Van Buren Capital, shares a similar sentiment, suggesting that Grayscale may eventually choose to refile its application as the “path of least resistance” for the firm.

Grayscale has been striving to launch a spot Bitcoin ETF since October 2021, a goal shared by other financial giants like BlackRock. However, the SEC has consistently rejected similar applications from various issuers, citing concerns about the crypto market’s stability and inadequate investor protection. Interestingly, the SEC has given its approval for Bitcoin futures ETFs, which provide investors with exposure to futures contracts rather than the underlying asset itself.

To Conclude

While Grayscale Investments may have secured a legal victory, the road to a Bitcoin spot ETF is far from certain. The SEC’s stance on this matter remains elusive, and the agency’s ability to influence the outcome raises questions about Grayscale’s prospects. As the battle continues, it’s becoming increasingly apparent that Grayscale and other entities seeking a spot Bitcoin ETF face an uphill struggle, despite recent developments in the crypto investment landscape.