In a recent interview with Bloomberg Markets, Grayscale Investments CEO Michael Sonnenshein described the U.S. appeals court’s decision to overturn the SEC’s ban on his firm’s proposed spot bitcoin exchange-traded fund (ETF). The ruling was hailed as a major step forward for the digital asset industry, reviving hopes of launching the first U.S. ETF to invest directly in bitcoin.
Is the SEC running out of time?
However, Sonnenshein expressed uncertainty about Grayscale’s next steps, saying: “We will have to look at the final operational procedures involved in the final warrant that the court will issue.” He further added, “Until the end of that period, We don’t know what the final opinion will be,” he said, referring to the 45-day full hearing window that will involve all 17 justices on the court, rather than the initial panel of three justices.
The crypto asset manager’s latest legal victory is seen as a pivotal moment for the industry. Grayscale has long argued that switching its bitcoin trust GBTC could unlock billions of dollars in value for its holders. The victory was considered a landmark, especially given the SEC’s historical reluctance to approve such products.
Despite the rosy outlook, Sonnenshein cautions that the path forward is not entirely clear. “There really shouldn’t be any further grounds for continuing to deny such products access to the market, as the SEC has been relying on,” he commented. However, he also pointed out that Grayscale has not received any communication from the SEC after the ruling.
The market reacted quickly. GBTC shares soared 17 percent on Tuesday, outperforming bitcoin’s 6 percent gain. However, GBTC shares fell more than 4% on Wednesday, with its holdings trading at a roughly 18% discount, according to Bloomberg data. Bloomberg Intelligence analyst James Seyffart commented on the discount, saying the market is now more confident about the switch than before, but some skepticism remains.
But the wider impact of the ruling is still being felt. Many are closely watching how the SEC will respond to the six spot bitcoin ETFs, and a decision will be made soon. Notable filers include industry giants such as Bitwise, BlackRock, Fidelity, and Invesco. The SEC’s justification for any potential delays has become even more interesting in light of the court’s recent ruling.
Reflecting on this journey, Sonnenshein said: “Yesterday was the culmination of more than a year of litigation. A huge win for Grayscale, a huge win for our investors and the entire cryptocurrency and investment community.” He also reiterated Grayscale’s commitment to the cryptocurrency space, emphasizing that “cryptocurrency as an asset class is here to stay.”
what will happen on friday
The industry is now waiting with bated breath to see how this landmark ruling will shape the future of the U.S. Bitcoin spot ETF.Eric Balchunas and James Seyffart, senior ETF analysts at Bloomberg, are now raised With Grayscale’s victory, the probability of a Bitcoin spot ETF will reach 75% this year and 95% by the end of 2024. “While we had included Grayscale’s victory in our previous 65 percent odds, the ruling was more consistent and decisive than expected, leaving the SEC with “little leeway,” Blachunas said.
Notably, with the Grayscale ruling, it will now be interesting to see how the SEC handles this batch of 6 spot Bitcoin ETFs with a decision due tomorrow (Friday). The list of filers includes Bitwise, BlackRock, Fidelity, Invesco, and others. The SEC’s delays and denials in the past depended entirely on the grounds the court just dismissed outright. So, what is the SEC’s rationale now? Or will it receive surprising recognition?
At press time, BTC is trading at $27,280.
Featured image via Modern Consensus, chart via TradingView.com