A Court Opinion Could Pave the Way for the First Spot Bitcoin ETF in the U.S.
A court opinion issued on Tuesday in favor of Grayscale Investments may open the door for the first spot bitcoin exchange-traded fund (ETF) in the United States. However, experts believe that the Securities and Exchange Commission (SEC) could still challenge the ruling. The U.S. Court of Appeals for the D.C. Circuit ruled that the SEC must re-review Grayscale’s bid for a spot bitcoin ETF after the asset management firm sued the agency last year. The court focused on the SEC’s differential treatment of spot bitcoin ETFs and futures-based funds, which it has previously approved.
Key Points:
- The SEC must re-review Grayscale’s bid for a spot bitcoin ETF following the court ruling.
- The court found the SEC’s denial of Grayscale’s proposal to be “arbitrary and capricious.”
- The SEC has 45 days to request an en banc hearing or can choose not to appeal and reconsider Grayscale’s proposal.
- The court’s decision could have a broader impact on other firms applying for spot bitcoin ETFs, including BlackRock and Fidelity.
- Some believe the SEC should rescind past bitcoin futures ETF approvals in light of the court’s ruling.
What’s Next for the SEC:
The SEC has several potential next steps following the court’s ruling. The agency could seek review in the Supreme Court or request a review by the en banc D.C. Circuit. Alternatively, the SEC may choose not to appeal and instead go back to reconsider Grayscale’s proposal. Experts suggest that the unanimous opinion of the D.C. Circuit panel makes it unlikely for the SEC to try taking the case to the Supreme Court.
Broader Impact and Reactions:
The court’s opinion could have a positive impact on other firms that have applied for spot bitcoin ETFs, such as BlackRock and Fidelity. The Crypto Council for Innovation sees the ruling as a precedent-setting decision for the broader crypto industry. However, some argue that the SEC should revoke previous approvals for bitcoin futures ETFs in light of the court’s ruling.
Hot Take:
The court’s opinion in favor of Grayscale Investments is a significant development in the quest for the first spot bitcoin ETF in the U.S. While the SEC still has options to challenge the ruling, the decision could have broader implications for the crypto industry and pave the way for other firms to pursue spot bitcoin ETFs. The SEC will need to carefully consider its next steps and whether it wants to continue its anti-ETF stance in light of the court’s ruling.
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