The U.S. Securities and Exchange Commission (SEC) has reportedly decided not to appeal a recent court ruling in favor of Grayscale Investments. The ruling requires the SEC to review Grayscale’s application for a spot Bitcoin exchange-traded fund (ETF). According to Reuters, the decision not to appeal was confirmed by a source familiar with the matter.
While the SEC’s decision not to appeal is significant, it does not guarantee the approval of Grayscale’s application. Bloomberg analysts have also noted that the SEC not appealing to the Supreme Court does not necessarily mean a positive outcome for Grayscale.
If the reports are accurate, the SEC will need to follow the court’s order from August and review Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. The appeals court is expected to issue a mandate outlining how the SEC should execute its ruling.
Bloomberg ETF analyst James Seyffart commented on the situation, stating that he does not believe the SEC will appeal to the Supreme Court either. Seyffart anticipates that dialogue between Grayscale and the SEC will begin in the coming week, and more information on the next steps will be available shortly after.
Moving forward, Seyffart suggested that it is likely the deadline for the SEC to approve or deny Grayscale’s spot BTC ETF application will be determined within the next week or two. If the SEC were to deny the application, Grayscale would have the option to appeal that decision, which would further prolong the process.
As of now, the SEC has around seven spot Bitcoin ETF applications awaiting a decision. Seyffart previously stated that there is a 90% chance of a spot Bitcoin ETF application getting approved in January 2024, specifically referring to Cathie Wood’s ARK Invest application.
Both Seyffart and Bloomberg’s senior ETF analyst Eric Balchunas had previously suggested a 75% chance of an application getting approved in 2023.
Overall, the SEC’s decision not to appeal the court ruling in favor of Grayscale Investments is a significant development. It indicates that the SEC will proceed with the review of Grayscale’s spot Bitcoin ETF application. However, the ultimate approval or denial of the application is still uncertain, and further dialogue between Grayscale and the SEC is expected in the coming weeks.
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