Grayscale Investments LLC Wins Legal Battle for Bitcoin ETF
Grayscale Investments LLC has obtained a major legal victory, allowing them to launch the first-ever Bitcoin exchange-traded fund (ETF) in the United States. This landmark decision has the potential to attract a significant amount of investment from the general public, leading to a 6% surge in Bitcoin’s price.
Key Points:
- Bitcoin’s price increased by 5.31% in the last 24 hours, reaching $27,506.05.
- The cryptocurrency maintains its top position with a market capitalization of approximately $535.6 billion.
- A three-judge appeals panel overruled the SEC’s decision to halt the ETF, stating that the denial was arbitrary and capricious.
- Grayscale’s pursuit of an ETF stems from the limitations of its closed-end trust structure, which prevents investors from redeeming shares during price drops.
- The move to an ETF could unlock around $5.7 billion from Grayscale’s $16.2 billion trust.
Grayscale Vs SEC: A Tug of War
The battle between Grayscale and the US Securities and Exchange Commission (SEC) reached its peak when a three-judge appeals panel in Washington overturned the SEC’s decision to halt the ETF. Judge Neomi Rao criticized the SEC’s inconsistent treatment of similar products as arbitrary and capricious.
A Glimpse into the Past
The SEC initially rejected Grayscale’s ETF proposal in June 2022 due to concerns about Bitcoin trading on unregulated markets and potential fraud risks. Grayscale filed a lawsuit, arguing discrimination by the SEC, especially considering the approval of similar Bitcoin futures ETFs.
Hot Take
The recent court decision is a testament to the ever-evolving landscape of cryptocurrencies in the mainstream financial world. Grayscale’s achievement opens the door for further innovations in the crypto sphere, potentially leading to more accessible and regulated investment opportunities.
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