Bitcoin (BTC) saw a surge in price on August 29th, reaching its highest point in two weeks, following the news that digital asset manager Grayscale won a lawsuit against United States regulators. The price of BTC/USD rose by $1,700 within just 30 minutes after the announcement, disrupting a stagnant trading period for Bitcoin that had persisted since mid-August.
The ruling by the United States Court of Appeals for the District of Columbia Circuit stated that the U.S. Securities and Exchange Commission (SEC) was incorrect in rejecting Grayscale’s application to launch a Bitcoin exchange-traded fund (ETF) based on the Bitcoin spot price. An unverified copy of the ruling circulating online claimed that the SEC’s denial was “arbitrary and capricious” as it failed to provide a clear explanation for its differential treatment of similar products. As a result, the court granted Grayscale’s petition and vacated the order.
With this ruling, Grayscale joins a growing list of firms seeking to launch the first spot Bitcoin ETF in the United States. However, the SEC has yet to approve any application for such an ETF. At the time of writing, BTC/USD was trading around $27,300, having reached a high of $27,723 on the Bitstamp exchange.
Analysts and market participants were quick to react to the news, predicting a positive impact on existing ETF applications, including that of BlackRock, the world’s largest asset manager. Michaël van de Poppe, founder and CEO of trading firm Eight, suggested that this ruling could mark the beginning of a bullish cycle for Bitcoin. In a social media post, he summarized, “This might sound weird, but we could be on the verge of the start of the bull cycle with this news.”
Grayscale’s legal battle with the SEC has been a long and slow-moving process. The firm’s CEO, Michael Sonnenshein, has repeatedly expressed their determination to convert the Grayscale Bitcoin Trust (GBTC) into an ETF. Following the court’s decision, Sonnenshein took to social media to thank investors for their support and to announce that their legal team would be reviewing the opinion.
The price of GBTC rose by over 17% to $20.60 at the time of writing on August 29th. Grayscale’s victory in this lawsuit has brought renewed optimism to the market and could pave the way for the approval of Bitcoin ETFs in the United States.
It is important to note that this article does not provide investment advice or recommendations. As with any investment, readers should conduct their own research and exercise caution.