Digital asset management firm Grayscale received a positive ruling from the D.C. Circuit Court of Appeals in their lawsuit against the U.S. Securities and Exchange Commission (SEC) regarding a bitcoin spot exchange traded fund (ETF). This victory has bolstered the confidence of Craig Salm, Grayscale’s Chief Legal Officer, who believes that the approval of bitcoin spot ETFs in the U.S. is a matter of “when, not if.”
The lawsuit stemmed from the SEC’s denial of Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into an ETF on June 29, 2022. However, the recent ruling by the court favored Grayscale, which currently holds 3.4% of the total bitcoin supply, amounting to billions of dollars.
Key Takeaway
The D.C. Circuit Court of Appeals ruling in favor of Grayscale against the SEC paves the way for the approval of bitcoin spot ETFs in the U.S., according to Grayscale’s legal officer.
The legal victory has been hailed as significant by Salm, who sees it as a triumph not just for Grayscale but for the entire crypto community. He emphasized the urgency of the ETF conversion, stating that there is no need to delay the process any further now that the path has been cleared.
The timeline for approval remains uncertain due to the 45-day review period. However, if there is no rehearing, Grayscale can proceed smoothly with its plans. Bloomberg ETF analysts have also increased their confidence in the approval of a bitcoin spot ETF this year, raising the odds from 65% to 75%. They are even betting on a 95% chance of approval by the end of 2024.
Salm highlighted the need for swift action, citing the current discount at which the GBTC is trading. He pointed out that the product, as it stands now, fails to meet the status of an ETF, resulting in a loss for the nearly one million GBTC investors spread across all 50 states.
In conclusion, the recent ruling in favor of Grayscale in their lawsuit against the SEC provides a much-needed boost in confidence for the approval of bitcoin spot ETFs. With the clear path paved, the crypto community eagerly awaits the final steps to convert the GBTC into an ETF, which could have a significant impact on the market and benefit the numerous investors who have already put their trust in Grayscale.
