The U.S. Securities and Exchange Commission (SEC) will reportedly not be appealing the recent court decision that favored Grayscale Investments. This decision requires the SEC to review Grayscale’s spot Bitcoin exchange-traded fund (ETF) application.
According to a report from Reuters, the SEC’s alleged decision not to appeal the ruling was confirmed by a source familiar with the matter. This means that the SEC will now have to follow the court’s August order to review Grayscale’s application to change its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
While the SEC’s decision not to appeal is significant, it does not guarantee approval of Grayscale’s application. Bloomberg analysts noted that this does not necessarily mean that the application will be approved.
The appeals court is expected to issue a mandate that outlines how the SEC should execute the ruling. Bloomberg ETF analyst James Seyffart believes the dialogue between Grayscale and the SEC will begin next week, and more information on the next steps will be available then.
Seyffart also suggested that we can expect to find out the deadline for the SEC to approve or deny Grayscale’s application in the next week or two. If the application is denied, Grayscale can appeal the decision, which would further extend the process.
Currently, there are around seven spot Bitcoin ETF applications awaiting a decision from the SEC. Seyffart previously stated that there is a 90% chance of a spot Bitcoin ETF application being approved in January 2024, specifically referring to Cathie Wood’s ARK Invest application.
Seyffart and Bloomberg’s senior ETF analyst Eric Balchunas have previously suggested that there is a 75% chance of an application being approved in 2023.
Grayscale’s victory in the court ruling appears to have raised hopes for the approval of a spot Bitcoin ETF. However, it is important to note that the SEC’s decision not to appeal does not guarantee approval and the process may still take time.
In the coming weeks, we can expect more clarity on the SEC’s timeline for reviewing Grayscale’s application, which will have a significant impact on the future of spot Bitcoin ETFs in the United States.
