In a surprising turn of events, the United States Securities and Exchange Commission (SEC) has reportedly decided that they will not challenge the recent court decision made in favour of Grayscale Investments.
The District of Court Columbia Court of Appeals in Washington made a ruling in August of 2023 that the SEC’s decision to reject Grayscale’s Bitcoin ETF proposal was not correct and that the SEC has not given any credible reasons as to why they rejected Grayscale’s Bitcoin ETF application. According to the Court, the SEC’s failure to provide a valid reason for rejecting the proposal doesn’t allow them to carry out their decision because such practices are deemed unlawful and cannot allowed to stand.
According to Bloomberg analysts, the SEC will also not appeal to the Supreme Court, but they emphasized that the SEC is not going to give up easily and give Grayscale the approval they seek.
The cryptocurrency market has been closely following the ongoing battle between the SEC and firms that want to register their Bitcoin ETF applications. Along with Grayscale, Fidelity and BlackRock are also waiting in the wings to see their applications accepted by the SEC, something which they are currently very apprehensive about approving.
Many crypto analysts and experts, along with several influencers, believe that the SEC’s efforts in stalling these approvals will not prove to be successful, and it is only a matter of time before these applications get approved. They also believe that if this happens, the crypto market will react very positively toward this development. We might also see a big pump in crypto asset prices after these Bitcoin ETF applications get approved.
According to Reuters, if the SEC doesn’t object to the court’s ruling, then they will need to follow the court’s order made in August and review Grayscale’s application to change its Bitcoin trust into a spot ETF. The appeals court is expected to issue a mandate specifically outlining how its ruling should be executed by the SEC.
Bloomberg ETF analyst James Seyffart stated via X (formerly Twitter) that he doesn’t think that the SEC will appeal to the Supreme Court. A possible dialogue will begin between Grayscale and SEC in the next week. He is hopeful that the crypto community will get updates about the matter sometime in the coming week or a week after that.
Seyffart also suggested that it is likely that we will find out in the next week or two what deadline the SEC will be given to approve or deny Grayscale’s spot Bitcoin ETF application. If the SEC denies the application, then Grayscale could appeal the decision, and the crypto market will have to wait further to witness Grayscale and other firms getting the required approval from the SEC. There are seven spot Bitcoin ETF applications that have been put before the SEC, and the crypto community is eagerly awaiting a decision from the SEC.
Seyffart also gave his predictions in another post that there is a 90% chance that a spot Bitcoin application will get approved in January of 2024. The highest probability that the firm that will see its ETF application get approved lies with Cathy Wood’s Ark Invest.
SEC’s chair Gary Gensler has been getting increased negative sentiments from the crypto market as he has seen the main entity standing behind the Bitcoin spot ETF facing rejection for the time being to be approved. The crypto community strongly believes that it will be only a matter of time before Gensler has to give way and the SEC has to approve these applications.
