Court backs Grayscale, overturns SEC decision blocking Bitcoin ETF

The District of Columbia Court of Appeals delivered a favorable verdict for Grayscale on Tuesday, reversing the Securities and Exchange Commission’s (SEC) earlier refusal to allow the company’s Grayscale Bitcoin Trust, known by its ticker GBTC, to become an exchange-traded fund (ETF).

Fast facts

• Following the court’s decision, the cryptocurrency market showed an upbeat response. Bitcoin surged more than 5%, trading at US$27,436 by 11:15 p.m. in Hong Kong, according to CoinMarketCap data. Meanwhile, STX, the token for the Bitcoin layer-2 solution, Stacks, saw a 14.6% jump to US$0.51.
• This pivotal ruling not only serves as a beacon of optimism for Grayscale but may also chart the course for other financial heavyweights, such as BlackRock and Fidelity, waiting in the wings for the SEC’s decision on their own spot Bitcoin ETF applications.
• Grayscale’s dispute with the SEC dates back to June 2022, following the commission’s approval of ProShares’ futures-based Bitcoin ETF in October of the previous year. Grayscale aimed to launch its own ETF, uniquely underpinning the fund directly with Bitcoin rather than relying on Bitcoin derivatives.
• The SEC, however, dismissed their application in the subsequent summer, raising alarms over potential market manipulations and the robustness of investor safeguards.

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Yohan Yun

Yohan is an Assignment Editor at Forkast and has worked as an assistant reporter covering stories in Asia for media publications such as Bloomberg BNA and Forbes, on topics related to Korea-US FTA, technology, environment, 2017 tax legislation amendments.

yohan.yun@forkast.news @hyoseopyun Yohan Yun