The US Securities and Exchange Commission (SEC) faces a critical deadline on October 13: to respond to a ruling in favor of grayscale investments. The ruling now requires the SEC to reconsider Grayscale’s application for spot bitcoin funding.
In response to this decision, the SEC can choose from three possible steps: appeal to the US Supreme Court, ask the Court of Appeals to review the ruling, or follow the court’s August recommendation by granting the Grayscale Bitcoin Trust Transfer Application (GBTC) in full. Rate a Place Bitcoin ETF.
A stay by the SEC is possible despite an unlikely appeal
In an Oct. 12 note, Bloomberg ETF analyst Eric Balzunas indicated there was a significant chance the SEC would not appeal: “We believe an appeal is unlikely. However, there could always be an unexpected twist.
While an appeal is unlikely, law firm Robes & Gray points out that there is a good chance the SEC will delay the process. For example, if the New York Stock Exchange had to resubmit GBTC’s listing, the SEC could delay up to eight months before making a final decision on the ETF.
Other requests are pending
At least seven applications for spot bitcoin ETFs are pending SEC approval. Although these applications were already submitted in 2023, they all faced delays and hurdles from the regulator. As a result, most applications will not be approved until March 2024 or even later.
While many applications are pending, most attention is focused on Grayscale’s spot bitcoin ETF application. If the SEC approves these, it will be challenging for the regulator to deny similar applications. Bloomberg analysts estimate a 75% chance of approval this year. By the end of 2024, this probability increases to 95%.
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