By
Bhushan Akolkar
April 29th, 2024
The US SEC is therefore expected to review Grayscale’s application to convert its GBTC to a spot Bitcoin ETF without prejudice.
As the Bitcoin (BTC) price crossed a crucial resistance zone between $31k and 32k in the past 24 hours, the United States Securities and Exchange Commission (SEC) began its preparations to review for the second time the application by Grayscale Investments to convert its Grayscale Bitcoin Trust (GBTC) to a spot exchange-traded fund (ETF). On October 23, the United States Court of Appeals for the District of Columbia Circuit officially closed the case between the Grayscale and the SEC, hence paving the way for a fresh review process that could lead to an imminent approval. Moreover, the US SEC could have already depleted its reasoning to deny a spot in Bitcoin ETF as seen by notable preparation by fund managers.
Notably, Grayscale is seeking to convert its $17 billion GBTC to a spot Bitcoin ETF in an attempt to attract more institutional investors seeking to tap into digital assets in a regulated and liquid market. However, some market analysts have warned that Bitcoin prices could drop further as more institutional investors seek out more avenues to liquidate their Bitcoin holdings into the secondary market. Nonetheless, more investors are expected to enter the digital asset industry as there is always a ready buyer with a willing seller in the Bitcoin market.
“The Grayscale team looks forward to continuing to work constructively with the SEC to convert GBTC to an ETF. GBTC is operationally ready, and we intend to move as expeditiously as possible on behalf of our investors,” Graysacle’s spokeswoman Jennifer Rosenthal said in a statement after Monday’s conclusion of the case.
Bitcoin ETF Frenzy and Grayscale vs SEC Case
Since the onset of the crypto bear market in late 2021, Grayscale Investments and its parent company Digital Currency Group have been embroiled in several controversial cases fueled by the FTX and Alameda Research implosion. However, the August 29 ruling on Grayscale vs SEC significantly increased the future growth prospects for the digital asset-focused company amid the mainstream adoption of blockchain technology and crypto assets.
Moreover, the United States SEC did not appeal the ruling, which raised the possibility of a spot Bitcoin ETF in the next few months. Moreover, BlackRock Inc (NYSE: BLK) has been making strategic investments in Bitcoin-related firms like MicroStrategy Inc (NASDAQ: MSTR) and mining companies.
The Bitcoin spot ETF frenzy has significantly rejuvenated the crypto bullish outlook as FOMO traders speculate on the potential approval. Furthermore, experts believe billions of dollars will flow into the Bitcoin and crypto market in the subsequent months after the SEC approves an ETF. However, some experts have warned that Bitcoin will be weaponized just like the US dollar in global geopolitics after the ETF approval.