Closer Prospect of Spot Bitcoin ETF Approval as SEC Drops Appeal in Grayscale Case

Closer Prospect of Spot Bitcoin ETF Approval as SEC Drops Appeal in Grayscale Case

Crypto News – The potential launch of a Spot Bitcoin exchange-traded fund (ETF) has come closer to fruition as the U.S. Securities and Exchange Commission (SEC) chose not to appeal a court order instructing a review of Grayscale’s application to transform its Bitcoin Trust into an ETF.

This development significantly improves the likelihood of SEC approval for spot Bitcoin ETFs, with market experts estimating the possibility at an impressive 90%.

SEC Abandons Appeal in Grayscale Case

On October 13, the financial regulatory body decided not to contest an August ruling that mandated a review of Grayscale’s application for a spot Bitcoin ETF.

Speculation regarding the SEC’s actions has notably impacted the discount of the Grayscale Bitcoin Trust (GBTC), reaching its lowest point this year at 15.88% as of October 13, based on data from Coinglass.

Grayscale and the SEC were involved in a prolonged legal dispute regarding spot ETF applications.

The firm argued that the SEC’s rejection of these applications was “arbitrary and capricious,” underscoring what it perceived as “unfair discrimination” against spot Bitcoin ETF issuers.

However, the situation shifted in August when a U.S. court ruled against the SEC, questioning the regulator’s rationale for consistently denying spot ETF applications while approving futures ETFs.

The SEC’s argument is grounded in a perceived lack of adequate investor protection in spot BTC ETFs, which has resulted in the rejection of all such applications over the past decade.

Probability of Bitcoin ETF Approval Surges to 90%

Meanwhile, analysts at Bloomberg have become increasingly confident about the possibility of introducing spot Bitcoin ETFs in the United States.

According to these analysts, there is a 90% probability that the SEC will give the green light for a spot Bitcoin ETF. They pointed to heightened interactions between the regulator and a fund sponsor, Ark and 21 Shares, stating:

“This exchange between the SEC and fund sponsors is standard practice for new launches but a first for spot Bitcoin ETF applications, indicating that the SEC is actively working towards approving Ark’s proposal.”

BeInCrypto previously reported that the analysts had initially estimated the probability at 75% following Grayscale’s triumph over the regulator in August.

Several asset management firms, including BlackRock, have pending applications for a spot bitcoin ETF with the SEC.