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January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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SEC’s Move Paves Way for U.S. Bitcoin ETF
Crypto Regulation | Oct 16, 2023
Image: Pixabay/petre barlea
The SEC, in a surprising move, has reportedly decided not to appeal its court loss against Grayscale concerning the conversion of its Bitcoin trust into an ETF paving the way for the first Bitcoin ETF in the U.S.
In August, the D.C. Circuit Court of Appeals ruled that the SEC's denial of Grayscale Investment’s application to convert the Grayscale Bitcoin Trust (GBTC) into an ETF was invalid.
The court labeled the rejection as "arbitrary and capricious," emphasizing that federal agencies must treat similar cases alike.
See: Bitcoin Payments on the Rise
The SEC had previously approved the trading of two bitcoin futures funds on national exchanges but denied Grayscale's bitcoin fund. This inconsistency was highlighted by Circuit Judge Neomi Rao, who pointed out the SEC's contradictory stance.
Market Response
The market's response to this news was swift and positive. Bitcoin's price surged and the uptick is a testament to the market's optimism regarding the potential of a Bitcoin ETF in the U.S., which could offer investors a more streamlined and regulated way to invest in Bitcoin.
See: Ether Futures ETFs Launch. VanEck Commits 10% to Developers
If Grayscale's Bitcoin ETF gets the green light, it could set a precedent for other similar products in the market.
Numerous asset management firms, such as BlackRock, Fidelity, and Invesco, have also submitted comparable applications to the SEC for a spot bitcoin ETF. The SEC is expected to make a decision on these submissions by the end of the upcoming year at the latest.
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