“SEC’s potential refusal of Grayscale’s Bitcoin ETF, despite a recent court win, highlights the ongoing regulatory challenges surrounding cryptocurrency adoption and showcases the need for clearer guidelines in the evolving digital asset landscape.”
Despite winning a legal battle against the U.S. Securities and Exchange Commission (SEC) over its Bitcoin spot exchange-traded fund (ETF) application, Grayscale Investments may not see its Grayscale Bitcoin Trust (GBTC) converted anytime soon. The court ruling does not have the power to require the SEC to convert GBTC, and it is up to the agency to decide. Senior ETF analyst at Bloomberg, Eric Balchunas, noted that the SEC still has control over the fate of GBTC and there is a chance that the agency will make Grayscale wait in line or require them to refile their application. Scott Johnsson, General Partner and General Counsel at Van Buren Capital, believes that Grayscale may eventually refile its application as it would likely be the path of least resistance. Grayscale has been attempting to launch a spot Bitcoin ETF since October 2021, along with other financial giants like BlackRock. The SEC has repeatedly rejected applications for spot Bitcoin ETFs from other issuers, citing concerns about the crypto market and investor protection. However, the agency has approved Bitcoin futures ETFs, which provide access to futures contracts rather than the asset itself.