Grayscale's Court Win Pivotal in SEC's Approval of Spot Bitcoin ETFs
Summary:
U.S. Securities and Exchange Commission (SEC) Chairman, Gary Gensler, acknowledged that Grayscale's Aug 2023 court win influenced the SEC's acceptance of spot Bitcoin exchange-traded funds (ETFs). Grayscale's victory came after an appeal against the SEC’s denial of a spot Bitcoin ETF in 2022, leading to a reconsideration of the product by the SEC. Despite the approval, Gensler highlighted that it does not equate to a Bitcoin endorsement. The SEC approved ten Bitcoin-based ETFs on Jan 10. following the landmark ruling, with Grayscale and BlackRock witnessing significant trading volumes.
Gary Gensler, the head of the U.S. Securities and Exchange Commission (SEC), acknowledged on January 12 that the landmark court victory of Grayscale Investments played a pivotal role in greenlighting spot Bitcoin exchange-traded funds (ETFs). Despite rejecting numerous requests for such a product since 2013, Gensler stated in an interview with CNBC’s Squawk Box that the August 2023 court ruling in favor of Grayscale shifted the SEC's attitude towards this type of crypto investment option: “Over the years, we have disallowed many of these types of applications. However, something altered the situation. I have inherent faith in the rule of law and respect for the judiciary, and we move on, taking into account new court decisions. I believe this is the most reasonable way forward.”
In spite of the approval, Gensler underscored that this did not by any means equal an endorsement of Bitcoin (BTC). His exact words were: "We do not endorse [Bitcoin]."
The SEC's change of attitude was triggered by its decision in Grayscale's favor, which was perceived as a landmark change in its stance towards Bitcoin ETFs. Earlier in June 2022, SEC had turned down Grayscale's application to convert its Grayscale Bitcoin Trust (GBTC) into a Bitcoin ETF, citing that the product was not designed to thwart fraudulent and manipulative maneuvers. Grayscale retorted by filing an appeal for review with the United States Court of Appeals for the District of Columbia Circuit, which resulted in Grayscale claiming a substantial triumph on August 29, 2023. The court ordered the SEC's legal justification for denial was inadequate and returned the case to the Commission for reassessment.
This legal battle turned out to be a boon for Grayscale. On January 10, the SEC sanctioned ten ETFs with Bitcoin as the primary asset. The launch trading session witnessed massive participation, with Grayscale’s GBTC contributing to $2.3 billion of the overall trading volume nearly half of the total $4.5 billion traded on the day, as per statistics provided by Yahoo Finance. BlackRock's iShares Bitcoin Trust (IBIT) came out second, with approximately $1 billion in trading volume. BlackRock CEO Larry Fink, also appearing on CNBC's Squawk Box show, expressed his faith in cryptocurrency as an asset class, albeit not as a currency.
Published At
1/12/2024 7:11:25 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.