Grayscale’s SEC victory had a huge impact on the market. This decision marks the second major setback for the SEC, which is determined to continue its enforcement actions against the crypto industry while failing to provide clarity in the regulatory context. On the other hand, the court’s side with Grayscale is the first in the USA. spot Bitcoin ETFIt may pave the way for .
Will Gary Gensler and the SEC admit defeat?
The SEC has spent a decade rejecting spot Bitcoin ETF proposals on the grounds that they are “designed to prevent fraudulent and manipulative actions and practices.” That era is now over, according to Jake Chervinsky, the lead attorney on the case and Variant Fund counsel. But there is a problem; The spot Bitcoin ETF that attracts all eyes has not been launched yet. The court did not direct the SEC to approve Grayscale’s ETF offering. Chervinsky explained that the decision only determined that the SEC’s analysis of “fraud and manipulation” was wrong.
There are several predictions to know about Grayscale’s SEC victory:
- One possible scenario is that the SEC may find an alternative justification for rejecting Grayscale’s offer, which could lead to longer and more costly legal confrontations. Chervinsky believes this is a viable option given the “extreme hostility of the SEC leadership towards crypto.”
- Another theory is that the agency considered the DC Circuit’s decision to “gracefully step out of its anti-ETF positions” and backed out after losing the battle. Chervinsky stated that this would be the “right move”.
- Political pressure on the SEC to approve spot Bitcoin ETFs is also notable. The lawyer stressed that the decision is not just about the asset management giant, adding that all TradFi is ready for a bitcoin ETF.
Several firms have opened spot Bitcoin ETFs for listing on Nasdaq or CBOE Global Markets this year. Among them is BlackRock, the world’s largest asset manager and “throwing heavy punches in DC” whose CEO Larry Fink is widely regarded as one of the strongest players in global finance. While Chervinsky believes a spot Bitcoin ETF is imminent, he noted:
“I have no doubt that we will find a place for the Bitcoin ETF sooner rather than later. The only question is whether the SEC wants to make this more painful for itself. Trust me, if there is another refusal, another lawsuit will be filed.”
Industry observers take a similar stance and believe the latest decision leaves the SEC with “very little leeway.” In fact, prominent Bloomberg ETF analysts Eric Balchunas and James Seyffart have raised the probability of a potential spot Bitcoin ETF to be launched to 75 percent this year and 95 percent by the end of 2024.
