Crypto markets surge following formalization of Grayscale v. SEC ruling
Markets have surged in the 24 hours since Grayscale’s Aug. 29 court victory against the SEC, widely seen as a crucial development in the path toward approval for a spot Bitcoin ETF, was formalized on Oct. 23, as was expected.
Grayscale Bitcoin Trust (GBTC) is up 5.9% in the day since, alongside a swath of other crypto assets. Bitcoin (BTC) gained 7.6% in the 24-hour period ending 10 p.m. UTC on Oct. 24. Bitcoin outperformed Ethereum (ETH), up 3.9% over the same time period, and the entire crypto market, up 5.4%.
Grayscale aims to convert its GBTC fund to a spot Bitcoin exchange-traded fund (ETF). Courts issued a judgment compelling the U.S. Securities and Exchange Commission (SEC) to review the relevant proposal on Aug. 29. The matter attracted attention again this week as courts issued a formal mandate that further compels a review.
Coinbase stock (COIN), meanwhile, gained 6.3%. Those gains may, in part, be related to a filing deadline in the company’s own legal case with the SEC or other broader developments concerning the crypto exchange. However, it is worth noting that Coinbase is expected to take part in surveillance-sharing agreements for various planned ETFs, including BlackRock’s but excluding Grayscale’s proposed fund.
ETF approval is far from guaranteed
Recent spot Bitcoin ETFs are largely seen as promising due to Grayscale’s court victory, BlackRock’s pursuit of its own fund, and Coinbase’s potential role in some ETFs.
However, despite that general optimism, the SEC has not approved any such fund to date, and there are causes for doubt. First, the above filing concerning Grayscale compels the SEC to review, but not necessarily approve, the company’s proposal.
Elsewhere, reports of apparent progress on BlackRock’s ETF appear to be premature. The ticker for BlackRock’s planned ETF recently appeared on the Depository Trust & Clearing Corporation’s (DTCC) website. Though that seemed to mark a step forward for the fund, the ticker later disappeared from listings.
Former SEC attorney Tom Gorman, though no longer involved in the agency, has also suggested that approval of a spot Bitcoin ETF is not a given.
