The chances of approval of a bitcoin ETF rose to 75% after Grayscale's victory in court
Date: 2023-08-31 Author: Karina Ziganova Categories: BLOCKCHAIN
Eric Balciunas and James Seyffart told Bloomberg that the likelihood that the US Securities Commission (SEC) will approve a spot exchange-traded fund (ETF) - Bitcoin - has increased to 75% this year, after Grayscale's recent victory over the financial regulator.
This 10% jump was comparable to the previous 65%, which experts attribute to the odds of a spot bitcoin ETF being approved. At the same time, Balciunas added that they were unaware of the fact that Grayscale won the case against the SEC, although they expected it. In addition, the firm received a solution that leaves "Sec very little room to maneuver."
Reviewers noted the image crisis that arose as a result of the loss to the SEC. Balchunas said:
Along with legal losses, there are also PR losses (which set narratives, change opinions).” This was widely covered in the media. We believe the legal and PR losses will combine to make the denial politically untenable.
Grayscale received a landmark ruling overturning the SEC's reluctance to approve the conversion of its Bitcoin Trust into an ETF. The court indicated that the financial regulator took an arbitrary and unreasonable approach to dismissing the firm's application. As a result of the review, it decided to review this statement again.
Following this news, the price of bitcoin and the wider crypto market increased after several weeks of minor volatility. However, the rally appeared to have cooled down, with BTC falling 2.9% in the last 24 hours to almost $27,000 from a previous drop of around 22%.
The SEC decided to postpone consideration of applications
However, according to Bloomberg experts, the SEC may further delay the filing of applications as it has the opportunity to consider the next steps after the decision.
Seyfarrt said:
For many applications, we expect pending orders this week. We believe that unconditional approval is very unlikely after the court's decision.
If the SEC rejects all in-DeFi bitcoin spotting applications, the analyst predicts, Hashdex’s application will become harder to reject due to its unique and fresh-baked approach.
Experts have suggested that a win could be bad for Grayscale even if it is good for other firms (other than those applying for Bitcoin ETFs). Elliot Stein, a Bloomberg litigation analyst, said that if the SEC wishes to be vindictive, it has the right to approve other filings and appeal the recent decision against Grayscale.
