The United States Securities and Exchange Commission (SEC) has reportedly decided not to appeal a recent court ruling that favored Grayscale Investments. This ruling requires the SEC to review Grayscale’s spot Bitcoin exchange-traded fund (ETF) application. The decision not to appeal was highlighted in a report from Reuters, citing a source familiar with the matter.
Bloomberg analysts also expect the SEC not to appeal to the Supreme Court, but they emphasize that this does not guarantee approval for Grayscale’s application. If the reports are true, the SEC will need to follow the court’s order and review Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
According to Reuters, the appeals court is expected to issue a mandate that outlines how the SEC should execute the court’s ruling. Bloomberg ETF analyst James Seyffart commented on the developments, stating that he does not believe the SEC will appeal to the Supreme Court. He expects dialogue between Grayscale and the SEC to begin in the coming weeks.
Moving forward, Seyffart suggests that we will likely find out in the next week or two what the deadline is for the SEC to approve or deny Grayscale’s spot BTC ETF application. If the SEC were to deny the application, Grayscale could appeal that decision, further prolonging the process.
Currently, there are around seven spot Bitcoin ETF applications awaiting a decision from the SEC. Seyffart also reiterated his view that there is a 90% chance that a spot Bitcoin ETF application will be approved in January 2024, specifically referring to Cathie Wood’s ARK Invest application.
Seyffart and Bloomberg’s senior ETF analyst Eric Balchunas previously suggested that there is a 75% chance of an application being approved in 2023. These developments indicate that the regulatory environment for Bitcoin ETFs is evolving, and there is increasing optimism for their approval in the near future.