Yesterday, bitcoin (BTC) price ended its boring sideways movement after a resounding Grayscale victory in the US legal battle. Securities and Exchange Commission (SEC) appeared on Bitcoin News. It’s a step in the right direction in terms of making a spot exchange traded funds (ETF) for Bitcoin. It’s not time yet, but that could change this week.
Bitcoin Spot ETF
First off, it’s important to understand exactly what Grayscale’s win is all about. Last year, the crypto asset manager took the SEC to court after its application for a spot ETF was denied. Specifically, Grayscale wants to convert its Grayscale Bitcoin Trust (GBTC) into a spot ETF.
Yesterday’s ruling showed that the SEC’s usual strategy of unequal treatment without explanation in court will not stand. However, the news does not mean that the exchange-traded fund has actually been approved. It just means that the SEC should reevaluate its decision to deny Grayscale’s filing.
Still, it’s a welcome win in the battle for a spot Bitcoin ETF. We can now prepare for an initial SEC response to all previous filings from financial giants.
BREAKING: Grayscale won the lawsuit against the SEC after the SEC rejected their ETF.
– Jelle (@CryptoJelleNL) August 29, 2023
The first deadline for Bitwise’s trial is scheduled for Friday. Applications from BlackRock, Van Eck, Wisdomtree, Invesco and Fidelity will follow on Saturday. Finally, on Monday, the baton will be handed over to Valkyrie.
The US regulator has the ability to approve, deny, or defer the submissions. To date, the SEC has exercised its right to delay a decision as much as possible.
Effect: Grayscale is ahead of BTC exchange funds
Among other things, the US court ruled that the SEC failed to provide evidence for nearly all of its claims and reasons why it should disallow a spot bitcoin ETF but allow futures ETFs.
Another important point is that the court finds that the spot BTC market is deeper and more liquid than the futures market, which is likely to make manipulation more difficult. Still, futures ETFs exist in the US market, and manipulation has always been used as a reason for spot ETFs to be rejected.
For now, all eyes are on Friday and Saturday and the crypto world is awaiting with hope.