The Chief Executive Officer (CEO) of Galaxy Digital Mike Novogratz recently emphasized that the coming of a spot Bitcoin (BTC)
Bitcoin ETF: the Grayscale vs SEC Factor
Novogratz made this statement after Bloomberg Intelligence ETF Analyst James Seyffart talked about the outcome of the lawsuit between Grayscale and the United States Securities and Exchange Commission (SEC) and what it means for the prospects of a spot Bitcoin ETF.
After receiving a rejection from the SEC for its request to convert its Grayscale Bitcoin Trust (GBTC) to a physically backed ETF, Grayscale challenged the U.S regulator to a legal battle. In one of its hearings, the investment asset management firm argued that the decision made by the SEC was not in alignment with the previous orders regarding approving the GBTC spot Bitcoin ETF.
Also, the asset manager claimed that the SEC lacks sufficient reasons to reject its spot BTC ETF application, especially after Bitcoin Futures ETF had been approved.
Many analysts and financial experts agreed that Grayscale has a very strong argument. They were confident enough to predict that Grayscale has a strong case, with a 70% chance of winning the lawsuit. However, the DC Court of Appeals delayed making a decision in Grayscale vs. SEC case and ended up postponing the hearing twice.
Grayscale’s Eventual Win
Earlier this week, the judge finally explained that the SEC failed to recognize the “obvious financial and mathematical relationship between the spot and futures markets” and as such, “It is ordered and adjudged that Grayscale’s petition for review be granted and the Commission’s order be vacated, in accordance with the opinion of the court filed.”
Judge Srinivasan Rao reiterated that the SEC did not provide enough reason as to why the application was rejected.
While this was not a stamp that a BTC ETF is imminent, the judgement is a green light on the path of an approval and since then, several crypto players have voiced optimism towards the coming of an spot Bitcoin ETF approval with Mike Novogratz now also sharing his optimism vocally.
The presence of top investment managers like BlackRock, Fidelity, WisdomTree in the spot Bitcoin ETF race is also likely to fuel or expedite an approval soon.