First Spot Bitcoin ETF Decision Due On Thursday As SEC Reels From Grayscale’s Landmark Legal Win
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A decision on the first of seven applications to launch spot Bitcoin ETFs is due to be made on Thursday by the US Securities and Exchange Commission, which is reeling from Grayscale Investments’ landmark legal win against the watchdog.
A decision on Bitwise’s application is due on Sept. 1 with applications by BlackRock, Fidelity, Invesco, VanEck, and Wisdomtree scheduled for a day later. Valkyrie’s application will be decided on Sept. 4.
The SEC has been hesitant to approve a spot ETF application because it believe the Bitcoin market is prone to price manipulation.
Bitcoin ETF Applications More Likely to Succeed
The deadlines comes hard on the heels of Grayscale’s win in its lawsuit against the SEC.
Bloomberg ETF analyst James Seyffart says the win increases the chances of a successful outcome for the subsequent applicants.
First. They would have to revoke the listing of #Bitcoin Futures ETFs. The order here from the DC Circuit basically said you can't argue about manipulation of markets while allowing Bitcoin futures ETFs. I still think this is quite unlikely…
— James Seyffart (@JSeyff) August 29, 2023
The SEC may delay its decision on the pending applications. The regulator has two more proposed deadlines for each application. The final deadlines for the SEC on these applications are March next year.
Grayscale Wins Spot Bitcoin ETF Lawsuit Against SEC
The largest digital asset manager, Grayscale, has posted a significant win against the SEC. The commission had rejected Grayscale’s application to convert its GBTC into a spot Bitcoin ETF, alleging that the product was not designed to prevent fraud and manipulation.
But the US Court of Appeals Circuit Judge Neomi Rao granted Grayscale’s petition for review on its ETF application and ruled that the SEC’s order to deny the GBTC listing be vacated.
The CEO of Grayscale, Michael Sonnenshein, said that its legal team was reviewing the court’s decision.
🚨 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
The Grayscale Bitcoin Trust is the largest Bitcoin fund, with over $14 billion worth of assets under management.
The shares of GBTC tend to trade in tandem with Bitcoin’s price and developments in the crypto industry. The product gives investors indirect exposure to Bitcoin’s price movement.
US Congressman Calls For Gary Gensler’s Ouster
Grayscale’s win against the SEC has triggered ripple effects. US Congressman Warren Davidson called for the ouster of the SEC Chair, Gary Gensler.
More evidence that Gary Gensler’s actions at the SEC are arbitrary and capricious. #FireGaryGensler https://t.co/1qYVnki8ja pic.twitter.com/IG2t6i9V40
— Warren Davidson 🇺🇸 (@WarrenDavidson) August 29, 2023
The Congressman opined that the ruling in favour of Grayscale offered more evidence that Gensler’s actions were arbitrary and capricious.
The House Financial Services Committee Chair, Patrick McHenry, also weighed in on the decision, saying Gensler’s criticism of the digital asset space ended.
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