Grayscale Investments, one of the contenders seeking to convert its Bitcoin (BTC) trust into a spot Bitcoin exchange-traded fund (ETF), may be awarded the long-awaited decision on its lawsuit against the United States Securities and Exchange Commission (SEC), this week.
Grayscale initiated legal action against the American regulator in June, last year, after an application to convert its Grayscale Bitcoin Trust (GBTC) into a spot market Bitcoin ETF was rejected.
Legal Experts Share Positive Views
On August 15, Scott Johnsson, a general partner of Van Buren Capital, took to X to highlight the importance of August, a period when District Courts typically see a transition of law clerks, prompting judges to address outstanding cases “before the new guard arrives.”
March '21/'22 cases with decisions within 160 days of oral: 30/32 (94%)
Days since Grayscale (March '23) oral: 160 days
Why should we expect August? Because law clerks for DC generally cycle in/out this month, so judges aim to clear prior caseload before the new guard arrives. https://t.co/vVj0dHus90
— Scott Johnsson (@SGJohnsson) August 14, 2023
He said that 30 out of 32 cases in March of 2021 and 2022 were heard by US District Courts within 160 days of oral testimony, which also landed them in August, adding that it has also been 160 days since Grayscale delivered its oral arguments in its suit against the United States Securities and Exchange Commission on March 7.
Meanwhile, Bloomberg analyst James Seyffart noted the decision could even come as early as August 15, noting the date has been his “theoretical Grayscale lawsuit decision date” for some time, adding, “8/15 has been my theoretical Grayscale lawsuit decision date for a while now but it’s really just an educated guess.”
Tomorrow is 8/15 👀 https://t.co/22d7PDKbxU pic.twitter.com/zQpTORujdg
— James Seyffart (@JSeyff) August 14, 2023
In response to Seyffart’s comments, Eric Balchunas, senior ETF analyst at Bloomberg, chimed in on the discussion adding, the decision could come out at 11:00 am EST, because the court usually releases decisions around that time.
Balchunas praised Johnsson’s legal acumen, further explaining that there are two key days to watch for a Grayscale decision this week, Tuesday and Friday, both at 11 am. He said
“Scott, who has more legal IQ than me, likes this Friday. These cases are announced on Tues and Fridays at 11 am. Either way, the point is it’s time to be on the lookout.”
Very good poss we learn Grayscale SEC outcome tmrw around 11am. Only a small fraction of cases have taken longer to get decision. So odds are pretty good. See below: https://t.co/YFp9pWmE8t
— Eric Balchunas (@EricBalchunas) August 14, 2023
Will Bitcoin ETF Approval Start a Rally?
Recently, crypto-services provider Matrixport published a report asserting the SEC is likely to approve several spot Bitcoin (BTC) exchange-traded funds in a row as the regulator is expected to respond to several Bitcoin ETF filings between August and the first week of September.
The report added that any SEC spot ETF approval could have a “material positive impact” on Bitcoin’s price, and investors should have enough “upside exposure” on any day that the regulator is scheduled to respond to the ETF applications.
The Naysayers Also Chime In
On the flip side, Bitwise Asset Management CIO Matt Hougan told CNBC last week, that crypto investors might have to wait a while longer for a decision from the SEC, expounding, “These are complex applications with a lot of data. I think they’re likely to extend this until the final review.”
Echoing in a similar tune, Valkyrie’s chief investment officer, Steven McClurg, had previously said that his company does not believe a spot Bitcoin ETF will be approved within the next year.
However, should the SEC move forward with the approval process, Hougan said the best outcome for investors would be the approval of multiple products. He said,
“I think there should be a fair playing field that allows us to have multiple spot Bitcoin ETFs that compete in the market. It will allow prices to be the lowest, it will allow competition to be the highest, [and] it will allow service to be the highest.”
Interestingly, Grayscale has also recently advocated for the SEC to approve all Bitcoin spot ETF applications simultaneously, to ensure no firm gains an undue advantage over others.
Crypto Community Awaits Decision With Bated Breath
This comes at a time when the crypto industry has increasingly been at loggerheads with the SEC over its crackdown on digital asset products, including those that offer investors returns on certain digital tokens.
It seems the final decision on the Bitcoin ETF case’s outcome could either offer vindication for the SEC’s posture or pave the way for other companies to offer spot bitcoin ETFs if the judges rule for Grayscale Investments.
