Grayscale’s Bitcoin ETF Decision Delayed
The US Court of Appeals has once again deferred its ruling on Grayscale’s attempt to convert its widely utilized Bitcoin Trust into a conventional spot Bitcoin ETF, raising further uncertainty within the crypto investment landscape. Grayscale’s Chief Legal Officer, Craig Salm, confirmed this development on August 22nd, indicating that the DC Circuit handling Grayscale’s case remains undecided. This prolonged decision-making has left various matters, including the fate of the proposed bitcoin (BTC) spot ETF, in a state of ambiguity.
Unfortunately not only is there no @Grayscale DC Circuit decision today. But there are no decisions at all! $GBTC pic.twitter.com/MiZDzZiVL9
— Craig Salm (@CraigSalm) August 22, 2023
Grayscale’s ETF Conversion Delay
This recent delay follows previous postponements earlier in the year, confounding industry expectations based on historical timelines. Grayscale, renowned for managing the world’s largest bitcoin fund, initiated a lawsuit against the SEC in June 2022. The company’s legal action was prompted by the SEC’s rejection of Grayscale’s bid to transform the substantial $20 billion Grayscale Bitcoin Trust (GBTC) into an ETF. The regulatory body cited concerns about the investment manager’s inability to address potential market manipulation issues as the reason for the denial.
The conversion from trust to ETF structure was intended to offer retail investors more accessible bitcoin exposure through regular brokerage accounts. Grayscale’s argument during a March 2023 hearing emphasized the SEC’s inconsistency, particularly in light of its approval of bitcoin ETFs tied to futures contracts in 2021. The core contention revolves around the Commission’s differing treatment of investment vehicles for the leading cryptocurrency, despite its significant market capitalization.
Vie for SEC Approval
Recent developments highlight a surge in applications for spot Bitcoin ETFs submitted to the SEC, beginning with the submission from global asset management firm BlackRock. Other industry players such as Fidelity, WisdomTree, and Invesco quickly followed suit, turning the regulatory approval process into a competitive race.
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Despite the mounting interest and multiple applications, the SEC’s approach to approving a spot Bitcoin ETF has remained cautious for an extended period. This extended regulatory deliberation has generated persistent uncertainty within the cryptocurrency markets, as investors and industry participants eagerly await a definitive resolution to clarify the regulatory landscape.
