The crypto market surged on Tuesday after a U.S. court ruled in favor of Grayscale Bitcoin Trust (GBTC), a leading crypto asset manager, in its lawsuit against the U.S. Securities and Exchange Commission (SEC) over its Bitcoin ETF application.
GBTC, which currently trades over-the-counter, has been seeking to convert its GBTC shares into a spot Bitcoin ETF that would track the price of the largest cryptocurrency. However, the SEC has repeatedly rejected or delayed its application, citing concerns over market manipulation, investor protection, and regulatory compliance.
Crypto Industry Scored Historic Win Against the SEC
On August 29, U.S. Court of Appeals Circuit Judge Neomi Rao ordered that GBTCās petition for review be granted and that the SECās order to deny the GBTC listing application be vacated. Judge Rao said that the SEC did not āoffer any explanationā as to why GBTC was in the wrong and that the agency failed to consider the benefits of a Bitcoin ETF for investors and the market.
šØ JUST IN šØ
The D.C. Circuit ruled in favor of @Grayscale in our lawsuit challenging the SEC's decision to deny $GBTC's conversion to an ETF!
Thank you to everyone who has been on this journey with us, especially our investors. We are grateful for your support andā¦
— Sonnenshein (@Sonnenshein) August 29, 2023
The court ruling does not guarantee that GBTC will be able to list its Bitcoin ETF, but it opens the door for further review and consideration by the SEC. GBTC said in a statement that it was āpleasedā with the decision and that it would continue to work with the SEC to ādemonstrate the meritsā of its proposal.
A Bitcoin ETF would allow investors to gain exposure to Bitcoin without having to buy or store the digital asset directly. It would also increase the liquidity, transparency, and efficiency of the Bitcoin market, as well as attract more institutional and retail investors.
The court ruling in favor of Grayscale Investments boosted the price of Bitcoin. The company wants to convert its Grayscale Bitcoin Trust into a spot ETF that tracks the price of Bitcoin. The SEC has opposed this application for a long time.
According to CoinGecko, Bitcoin rose 5.2% in 24 hours and reached $27,472. The ruling also triggered a liquidation of cryptocurrency short positions worth over $76 million in one hour. More than $34 million of them were short BTC positions.
