A federal judge has overturned the United States Securities and Exchange Commission\u2019s decision to deny an exchange-traded fund (ETF) offering from Grayscale Investments through its Bitcoin\u00a0Trust, but many experts have pointed out the court ruling will not automatically lead to the first spot Bitcoin ETF in the country.<\/p>\n
In an Aug. 29 decision with the U.S. Court of Appeals for the District of Columbia Circuit, Judge Neomi Rao supported Grayscale\u2019s position that its proposed Bitcoin (BTC)\u00a0ETF was \u201cmaterially similar\u201d to Bitcoin futures exchange-traded products already approved by the Securities and Exchange Commission (SEC) for trading. The court largely ruled that the SEC\u2019s justification of denying Grayscale\u2019s Bitcoin ETF on the grounds it was not \u201cdesigned to prevent fraudulent and manipulative acts and practices\u201d was insufficient, and the matter will return to the commission for review.<\/p>\n
To date, the SEC has denied all spot crypto ETF offerings in the U.S., though many applications are currently being reviewed, including those from BlackRock, ARK Invest, Bitwise Asset Management, VanEck, WisdomTree, Invesco and Galaxy Digital, Fidelity, and Valkyrie. The commission has the means to keep delaying a decision or otherwise pushing the final deadline for approval on the majority of the aforementioned applications until March 2024. <\/p>\n
At the time of publication, the SEC had not publicly commented on the appeals court decision but reportedly said it would be reviewing the case to determine its next steps. The commission will likely have the opportunity to appeal the decision, but many experts have claimed that the initial Grayscale victory could pave the way for eventual approval.<\/p>\n
\u201cDespite the inevitable SEC appeal, to our mind there is no doubt now, spot BTC ETFs are coming to the U.S.,\u201d said Tim Bevan, CEO at ETC Group. \u201cWe don\u2019t believe the SEC will act as kingmaker and the most likely outcome is a block approval of applications that meet requirements, probably in Q1 \u201924.\u201d<\/p>\n
Lolli CEO and co-founder Alex Adelman said the appeals court ruling would \u201cput new pressure on the SEC\u201d in its justification for rejecting spot Bitcoin ETF applications. He added the BTC price rally following the news could be interpreted as a \u201cvote of confidence\u201d for spot investment vehicles linked to Bitcoin:<\/p>\n
\u201cNow is the time for the U.S. to embrace innovation by making bitcoin available to investors through exchange-based products or risk falling behind global powers that are moving faster to claim this advantage.\u201d<\/p><\/blockquote>\n
Related: <\/em><\/strong>Jacobi spot Bitcoin ETF classed as \u2018environmental investing\u2019 by issuer<\/em><\/strong><\/p>\n
A spokesperson for the Crypto Council for Innovation (CCI) told Cointelegraph the ruling opened the door to a wider range of investors looking to offer a spot BTC vehicle in the United States. According to the CCI, \u201cspot bitcoins ETFs are now closer to a potential launch.\u201d<\/p>\n
The next steps for either Grayscale moving forward with its application or the SEC appealing the decision are unclear. The asset manager could refile with the SEC, aiming to make the spot investment vehicle application more like that of a Bitcoin futures-linked ETF. Experts are reporting the SEC also has the option of filing for an “en banc” hearing in which all judges on the D.C. circuit \u2014 rather than the three which ruled on the Grayscale appeal \u2014 would hear the matter. <\/p>\n