On Tuesday, the U.S. Court of Appeals for the District of Columbia Circuit Big SEC win awarded to Grayscale Reverse the SEC’s previous order to convert GBTC into a bitcoin spot ETF.
Grayscale’s victory over the SEC came as no surprise to some cryptocurrency stakeholders, however, as they, more than others, foresaw the company’s victory over the SEC.
Crypto Stakeholders Predict Grayscale Victory
After Grayscale filed its initial lawsuit against the SEC, cryptocurrency lawyer John Deaton was one of the first experts to predict Grayscale’s victory over the SEC.
Deaton’s forecast was made in February 2023 X (former Twitter) post February 28, 2023.
i predict win @grayscale.When you fight back, the SEC doesn’t win as successfully as you do @Gary Gensler Others would have you believe – like @s_alderoty Recently tweeted that the SEC has lost 4 of the past 5 cases before the Supreme Court. https://t.co/QakllHSDiM
— John E. Deaton (@JohnEDeaton1) February 28, 2023
“A lot of smart lawyers thought the SEC would win the case because Grayscale was trying to meet a very high and difficult bar to justify the agency’s arbitrary and capricious treatment,” he said.
Now, after the company’s victory over the SEC, Deaton has also acted X (formerly Twitter) Emphasize why he is confident in his predictions about the case. He explained that the SEC “can’t reasonably explain why they’re awarding futures ETFs and not spot.”
I’m sure the SEC will lose because I don’t believe they can rationalize why they awarded futures ETFs instead of spot. Every time they were asked why they took such a position, they were unable to explain it logically and coherently. pic.twitter.com/SBLdFGQ5HI
— John E. Deaton (@JohnEDeaton1) August 29, 2023
Another cryptocurrency expert predicting Grayscale’s victory over the SEC is Elliot Z. Stein, a senior legal analyst at Bloomberg Intelligence. Elliott’s forecast was made during oral arguments delivered by Grayscale in March.
In the debate, Grayscale said the SEC’s decision not to approve its ETF application was the very definition of an arbitrary decision. The judge in the case appeared to agree with Grayscale’s argument, saying the SEC did not offer a reasonable explanation for why they did not approve Grayscale’s application.
That prompted Elliott to reverse his previous view on the case, predicting that the investment manager’s chances of winning the case against the SEC rose from 40% to 70%.
“The SEC and Chairman Gary Gensler may be bracing for losses and hoping to pre-emptively soften them or make them worse by approving spot bitcoin ETF applications before or around the same time as the court ruling,” Elliot said in a June research note. Meaningless.” .
However, Elliott is not the only Bloomberg analyst who is confident in Grayscale’s victory over the SEC. James Seyffart and Eric Balcunas are two other predictive cryptocurrency analysts A victory over the SEC could happen this year.
Another reason we are giving a 50% chance of Spot Bitcoin ETF approval is our Senior Legal Analyst @NYCStein Giving Grayscale a 70% chance of winning the case against the SEC, the SEC may approve BlackRock’s ETF as a way to save face using a trusted “adult” TradFi and stick it to Grayscale @JSeyff pic.twitter.com/pHydOcpuQo
— Eric Balchunas (@EricBalchunas) June 27, 2023
Beating the SEC’s Impact
Grayscale’s victory over the SEC had a major impact on the crypto market.According to the data coin glassThe victory triggered more than $95 million in market liquidation in the first few hours, with short traders bearing the brunt.
Additionally, within the first 24 hours after a victory, to liquidate Volume rose to over $120 million.
On-chain data from Coinglass shows that 88% of the $97 million in liquidations came from short traders. Bitcoin (BTC) and Ethereum (ETH) each accounted for more than $60 million in total liquidations, followed by BNB, XRP, Solana (SOL), Bitcoin Cash (BCH) and others, with other losses accounting for the rest.
GBTC share price recovers above $20 | Source: Grayscale Bitcoin Trust on Tradingview.com
Featured image via CryptoMeter, chart via Tradingview.com