Aside from the Grayscale Bitcoin Spot ETF, the SEC is also reviewing other Bitcoin ETF proposals.
The US Securities and Exchange Commission (SEC) is expected to announce its decision on the Grayscale Bitcoin Spot ETF this week, according to pundits.
The Grayscale Bitcoin Spot ETF was filed by Grayscale Investments, the largest digital currency asset manager, in 2016. The fund is a proposed exchange-traded fund (ETF) that would track the price of Bitcoin directly. The Grayscale Bitcoin Spot ETF would also convert the existing Grayscale Bitcoin Trust (GBTC), which holds over 636,000 Bitcoins (BTC), into an ETF.
In June 2022, the SEC rejected Grayscale’s application. In return, Grayscale sued the regulator for inconsistency in its treatment of investment vehicles. Several industry commentators including ARK Invest’s Cathie Wood believe Grayscale will win the lawsuit.
According to Finance Lawyer Scott Johnsson, law clerks in US District Courts generally cycle out in August. Consequently, judges push to clear their workload before the change happens.
Additionally, Mr. Johnson pointed out that 30 out of 32 cases in March of 2021 and 2022 were heard by United States District Courts within 160 days of oral testimony. Interestingly, it has also been 160 days since Grayscale delivered its oral arguments in its suit against the SEC.
Bloomberg analyst James Seyffart also noted the decision could come as early as Aug. 15 according to his analysis.
Grayscale Bitcoin Spot ETF Approval Could Spur Bitcoin Adoption
If approved, the asset class would be the first of its kind in the US and could potentially boost the demand and adoption of Bitcoin among institutional and retail investors. This would eliminate the premium or discount that GBTC often trades at compared to the spot price of Bitcoin.
However, the approval is not guaranteed, as the SEC has repeatedly delayed or rejected previous Bitcoin ETF applications. The SEC has been known to cite concerns over market manipulation, fraud, and investor protection. The regulator is also skeptical about the reliability and transparency of the ‘unregulated’ Bitcoin spot market.
Aside from the Grayscale Bitcoin Spot ETF, the SEC is also reviewing other Bitcoin ETF proposals. VanEck, BlackRock, WisdomTree, Fidelity, and Valkyrie have all submitted proposals for their spot ETFs. Thus, the approval could also pave the way for those of the other companies. This is especially true because Grayscale has opined that the SEC should approve all Bitcoin spot ETF applications simultaneously to reduce first-mover advantage between applicants.