How Did Grayscale Outpace Its Competitors in the Spot Bitcoin ETF Race?

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• History was made in the United States with the long-awaited approval of the Spot Bitcoin Exchange-Traded Fund (ETF) product.
• Grayscale Investments strengthened its legal team by hiring former Obama Administration Prosecutor Donald B. Verrilli.
• The SEC experienced back-and-forth movements with potential applicants as they submitted proposals to launch the spot Bitcoin ETF product, demanding compliance with specific requests.

The U.S. Securities and Exchange Commission has approved spot Bitcoin ETFs, including Grayscale!

Grayscale Achieves Success with Spot Bitcoin ETF

History was made in the United States with the long-awaited approval of the Spot Bitcoin Exchange-Traded Fund (ETF) product. The now-confirmed approval of Grayscale Investments has earned the company well-deserved praise. Grayscale changed the narrative by deciding to transform its Grayscale Bitcoin Trust (GBTC) into a full-fledged Spot Bitcoin ETF.

This effort for approval was initially met with resistance from the SEC, as the regulator stated that the market was not mature enough to launch such a product due to the potential for manipulation. Despite successfully managing the Grayscale Bitcoin Trust, Grayscale Investments decided to file a lawsuit against the commission under the leadership of Gary Gensler by refusing to accept this decision.

Believing it to be a strong case to ensure a challenging struggle, Grayscale Investments strengthened its legal team by hiring former Obama Administration Prosecutor Donald B. Verrilli. Along with the experience brought by the legal team, a robust challenge was presented, and the company achieved a victory over the regulator in late August 2023.

In the decision delivered by Chief Judge of the U.S. Court of Appeals Sri Srinivasan, the SEC was asked to review its decision to reject Grayscale’s application, stating that the rejection was “arbitrary and capricious.” In a surprising move, the SEC declined to appeal, solidifying the company’s chances of subsequent approval.

Impressive Struggle Against All Applicants

Despite Grayscale Investments playing a leading role, other applicants such as BlackRock Inc., Fidelity Investments, Bitwise, and VanEck also played a role in bringing the product to life. The SEC experienced back-and-forth movements with potential applicants as they submitted proposals to launch the spot Bitcoin ETF product, demanding compliance with specific requests. From adopting the Cash Creation model to outpacing competition by reducing fees, the race to launch this spot Bitcoin ETF has been a marathon with the potential for long-term rewards.