The United States Securities and Exchange Commission (SEC) reportedly has no plans to appeal the groundbreaking loss in the Grayscale Investments case. An anonymous individual familiar with the matter recently revealed, boosting the odds of the Grayscale Bitcoin Trust (GBTC) being converted into a spot Bitcoin exchange-traded fund (ETF).
SEC Opts Not To Appeal Grayscale Bitcoin ETF Ruling
The U.S. SEC has reportedly decided not to appeal the recent court ruling that favored Grayscale Investments.
According to a Reuters report citing an unnamed person familiar with the matter, the SEC had until Friday midnight to make a decision on whether it would be challenging the loss, but the securities regulator let that deadline come and go without lodging an appeal.
The D.C. Circuit Court of Appeals ruled in August that the SEC’s denial of Grayscale’s bid to transform its flagship Grayscale Bitcoin Trust (GBTC) into a spot ETF was invalid and had to be re-reviewed, describing it as an “arbitrary and capricious” rejection. The court contended that since the SEC had greenlighted Bitcoin futures ETFs, it could not also reject spot-based products.
Now that the SEC does not intend to appeal, pundits believe that the agency will likely start looking into Grayscale’s application.
The Bitcoin price soared by over 1.3%, in the minutes following the report on the SEC’s plans to forego an appeal, climbing above the $27,000 mark.
It’s worth mentioning that Grayscale is also attempting to convert its Ethereum Trust into a spot Ethereum ETF following the SEC’s approval of the first futures Ethereum ETFs on October 2.
Bloomberg Analysts Remain Optimistic On Spot Bitcoin ETF Approval
Although the SEC will now have to revisit Grayscale’s filing, that doesn’t mean a spot market Bitcoin ETF will be automatically approved. The SEC could still deny it based on different grounds.
Bloomberg ETF strategist James Seyffart observed on the X (formerly Twitter) platform:
“I do not think they will appeal to the Supreme Court either. Dialogue between Grayscale and SEC should begin next week. Hoping for more info on next steps sometime next week or week after?”
Going forward, Seyffart indicated that it is possible that the crypto community will find out in the next week or two what the deadline is for America’s top financial cop to give the regulatory blessing or reject Grayscale’s spot Bitcoin ETF request.
Seyffart, along with his Bloomberg colleague Eric Balchunas, previously predicted a 75% chance that a spot crypto ETF will get approved this year. They give the product a 90% chance of approval by January 2024.