The U.S. Securities and Exchange Commission (SEC) will soon have to make a decision on whether to approve seven of the spot Bitcoin exchange-traded funded applications (ETFs), starting with the Bitwise ETF Trust on September 1.
This comes amidst the regulator’s defeat against crypto asset manager Grayscale, whose application to convert its Bitcoin trust into a spot ETF was denied multiple times by the SEC.
In its decision, the U.S. Court of Appeals for the D.C. Circuit sided with Grayscale, stating that the SEC did not give an adequate explanation as to why it had rejected the application and now the agency will have to review Grayscale’s product all over again.
SEC Set To Decide On 7 Spot Bitcoin ETF Applications In The Span Of 4 Days
Crypto investment firm Bitwise will learn if its BTC exchange-traded fund application for the spot market will win the SEC’s approval on September 1. Followed by BlackRock, VanEck, Fidelity, Invesco, and Wisdomtree the very next day. Meanwhile, Valkyrie is expected to hear back from the SEC regarding its application on September 4.
The crypto market, which has been facing a downturn over the past couple of weeks, received a jolt of energy after a federal court sided with Grayscale in its lawsuit against the SEC.
Court Decision In Favor Of Grayscale Will Force The SEC To Make A Decision On Bitcoin ETFs
The U.S. Court of Appeals ruled on August 29 that the SEC’s decision to reject Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF was “arbitrary and capricious”.
The court’s decision does not mean that the regulator must approve the application right away but review it once more to determine whether it can be listed on the stock market without any complications.
The SEC still has a 90-day window to file an appeal with the U.S. Supreme Court or apply for an en banc review, which involves a full circuit court overturning a ruling made by a three-panel judge.
In case the regulator does not appeal the decision, the court will need to explain how its decision is to be executed. This would mean the SEC will be instructed to approve Grayscale’s application or at the least, revisit it.
Market experts say there are two viable options for the SEC with regard to the court’s decision. Either accept defeat and approve the conversion of Grayscale’s GBTC Trust to a spot Bitcoin ETF, revoke the entire Bitcoin futures ETF listings, or deny Grayscale’s application on the grounds of a new valid argument.
According to Bloomberg market analyst Eric Balchunas, it is unlikely that the SEC will consider revoking Bitcoin futures contracts as reports suggest that the financial watchdog is now open to approving Ethereum futures ETFs.
The SEC first gave the approval to list Bitcoin futures ETFs in October 2021.
Experts Predict Bitcoin Prices To Rise Once Spot ETFs Are Launched In The Market
Austin Arnold of the crypto news platform Altcoin Daily says there are three possible scenarios that will play out by the end of the week. Either Grayscale will be allowed to turn their Bitcoin trust into a spot ETF or BlackRock will become the first-ever company to launch a Bitcoin ETF.
He also added that Ark Invest’s ARK 21Shares, which was one of the early applicants for a Bitcoin spot ETF, also has a chance of being approved as the first exchange-traded crypto product in the stock market.
Arnold says the moment will be a milestone for the industry and will be key to enabling broader crypto adoption. A spot Bitcoin ETF will allow traditional investors to invest in the BTC without having to worry about where to buy the asset from or how to store it.
Experts predict that the price of Bitcoin will only rise as investors flock in to buy shares in a given ETF as the fund will hold a certain amount of the asset, which is ultimately good for the industry.
At the time of writing, Bitcoin (BTC) is trading at $27,246 – down 0.7% in the last 24 hours.