SEC Decides Not to Challenge Court Ruling on Grayscale Bitcoin ETF

The United States Securities and Exchange Commission (SEC) has reportedly chosen not to appeal the recent court decision that favored Grayscale Investments, a move that signals a significant development in the ongoing saga surrounding Bitcoin exchange-traded funds (ETFs). According to an Oct. 13 report from Reuters, citing an inside source, the SEC’s decision not to challenge the ruling by the U.S. Court of Appeals for the District of Columbia Circuit means that the regulator is now obligated to review Grayscale’s application for a spot Bitcoin ETF.

While the SEC’s move not to appeal might suggest a step toward progress, analysts from Bloomberg have cautioned against assuming immediate approval for Grayscale’s ETF application. Despite the decision, the application will still undergo the SEC’s rigorous review process. The appeals court is anticipated to issue a specific mandate outlining how the SEC should execute its review based on the August order.

Commenting on these developments, Bloomberg ETF analyst James Seyffart shared his insights, suggesting that the SEC might engage in dialogue with Grayscale in the coming week. He also expressed hopes for more clarity on the next steps in the near future. Seyffart added that it’s likely we will learn the deadline for the SEC’s decision on Grayscale’s spot Bitcoin ETF application within the next week or two.

However, if the SEC were to deny Grayscale’s application, Grayscale could potentially appeal the decision, prolonging the process further. Currently, there are approximately seven spot Bitcoin ETF applications awaiting the SEC’s decision, heightening anticipation within the crypto community.

Looking ahead, Seyffart reiterated his optimism about the approval of a spot Bitcoin ETF, estimating a 90% chance of approval in January 2024. He specifically mentioned Cathie Wood’s ARK Invest application, which has gained notable attention. Both Seyffart and Eric Balchunas, Bloomberg’s senior ETF analyst, had previously indicated a 75% chance of an ETF application approval in 2023, reflecting the growing momentum and interest in the crypto ETF space.

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