Expectations were for the decision to come out today in Grayscale’s lawsuit with the SEC on Bitcoin ETF conversion. However, this hope was also in vain in the case, which is very important for the crypto money market.
No decision has been made in Grayscale’s lawsuit against the SEC!
Despite the rumors, no decision has been made in Grayscale’s lawsuit against the Securities and Exchange Commission (SEC) over their rejection of the spot Bitcoin Exchange Traded Fund (ETF) conversion. Some experts were waiting for a decision today, with reasonable grounds in their opinion. One of them, Bloomberg Intelligence Analyst James Seyffart, eliminated this expectation with a post he made. In this context, Seyffart made the following statement:
Unfortunately today is not that day. There is no decision in the Grayscale and SEC lawsuit regarding the conversion of GBTC to Bitcoin ETF. Come back next Tuesday for more potentially useless updates!
UPDATE: Unfortunately today is not the day either. No decision on @Grayscale vs @SECGov case for converting $GBTC into a #Bitcoin ETF.
Come back next Tuesday for more potentially useless updates! https://t.co/RdbwNy1nSM
— James Seyffart (@JSeyff) August 18, 2023
Possible implications of the decision for the cryptocurrency market
The potential outcome of the lawsuit, no matter when it is decided, could set a precedent for the future of crypto-asset transactions. Grayscale is the global leader in cryptocurrency asset management. He has been fighting a legal battle for months against the SEC’s decision to prevent the company from converting its Bitcoin investments into spot ETFs.
The core of Grayscale’s argument focuses on what they perceive as unfair treatment of spot Bitcoin ETFs. This lawsuit has sparked controversy about the SEC’s role in regulating and overseeing cryptocurrencies. In response, the SEC argues that its decisions are based on the need to protect investors from unpredictability and possible market manipulation associated with cryptocurrencies. Thus, it stands firm in its current position.
Recent history of Grayscale’s ETF issues
As you follow on Kriptokoin.com, Grayscale initially applied to convert their Bitcoin Trust (GBTC) into an ETF. However, the SEC dismissed it, citing concerns about market manipulation and Tether’s role in the crypto ecosystem. This refusal prompted Grayscale to appeal the SEC’s decision, citing “special rigidity” in the SEC’s decision. Grayscale noted that approving several Bitcoin Futures ETFs is inconsistent with rejecting a spot ETF product. That’s because they both charge “based on overlapping indexes,” he argued, and are “subject to the same risks and hedges.”
Grayscale Investments, a subsidiary of Digital Currency Group (DCG), filed a legal action against the SEC in October 2022, opposing the regulator’s discriminatory practice that allows Bitcoin Futures ETFs but not spot ETFs. In March 2023, during the initial appeal hearing, judges questioned the SEC’s rationale for rejecting Grayscale’s spot Bitcoin ETF application.
GBTC outperformed the leading cryptocurrency Bitcoin!
By July 2023, Grayscale’s GBTC outperformed Bitcoin’s value. Thus, it narrowed its discount to net asset value. Bitcoin recorded 17% gains in the same time frame. By comparison, GBTC witnessed an increase of around 43% in the past month. This performance was attributed to BlackRock’s Bitcoin spot ETF application and similar applications from other traditional financial institutions.
Bloomberg’s Senior ETF Analyst Eric Balchunas shared his prediction on the Grayscale lawsuit against the SEC on Aug. Accordingly, Balchunas stated that a possible decision could be announced on August 18. The outcome of this decision is likely to have significant implications for the approval of exchange-traded products (ETPs). Legal contention between Grayscale and the SEC has the potential to impact future regulatory guidelines and practices. This float represents a pivotal moment in the evolution of the cryptocurrency market.
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