The SEC Faces Deadline to Appeal Court Decision on Grayscale’s Bitcoin Fund
The United States Securities and Exchange Commission (SEC) is nearing its deadline to appeal a court decision that favored Grayscale Investments. The court ruling requires the regulator to review Grayscale’s application for a spot Bitcoin fund. While many believe the SEC won’t appeal, analysts suggest that there are still ways for the regulator to delay the approval of Grayscale’s spot Bitcoin ETF conversion.
Possible Actions by the SEC
By October 13, the SEC must choose to either appeal the court’s decision to the Supreme Court, request a revision from the Appeals Court, or review Grayscale’s bid for a spot Bitcoin ETF as directed by the court’s order in August. Analysts, such as Eric Balcunas from Bloomberg, consider an appeal unlikely but acknowledge the possibility of other obstacles.
SEC’s Options for Delaying Approval
According to James Seyffart, another Bloomberg ETF analyst, it is unlikely that the SEC will attempt to deny Grayscale’s application on new grounds. However, Seyffart suggests that the regulator could find ways to further delay approval.
Potential Scenarios for Delays
Ropes & Gray, a law firm, warned that the GBTC application could be sent back to the SEC for review. This would give the regulator another opportunity to reject it based on different grounds. Another possible scenario involves a new filing by the New York Stock Exchange to list GBTC, which could lead to an eight-month waiting period for an SEC decision.
Implications for Other Bitcoin ETF Applications
Currently, there are seven spot Bitcoin ETF applications awaiting approval from the SEC. These applications have faced delays and pushbacks from the regulator, with most expected to reach final approval deadlines in March 2024 or later. The approval of Grayscale’s spot Bitcoin ETF conversion could set a precedent for other applications.
The Likelihood of Approval
Bloomberg analysts now estimate a 75% chance of an approved spot Bitcoin ETF this year, and a 95% likelihood by the end of 2024, following Grayscale’s court victory.
Hot Take: SEC Faces Decision on Grayscale’s Bitcoin Fund Appeal
The SEC is approaching its deadline to appeal the court decision in favor of Grayscale Investments. While an appeal is unlikely, the regulator may find ways to delay the approval of Grayscale’s spot Bitcoin ETF conversion. Different scenarios, such as sending the application back for review or a new filing by the NYSE, could lead to further delays. The outcome of Grayscale’s application is significant as it could impact the approval of other Bitcoin ETF applications. Bloomberg analysts believe there is a high likelihood of an approved spot Bitcoin ETF, with increasing chances by the end of 2024.
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