What Happens Next for Bitcoin ETFs After Grayscale's Win?

Bitcoin’s price went up to a two-week high following a court ruling that the U.S. Securities and Exchange Commission (SEC) wrongly rejected Grayscale’s application for a bitcoin exchange-traded fund (ETF). This victory could have implications for other companies seeking to launch bitcoin ETFs, such as BlackRock and Fidelity.

Since now Grayscale has won the legal battle to convert its Bitcoin Trust product into a full-fledged ETF it will be a game changer move for others. This decision has already pumped cryptocurrencies like Bitcoin and Ethereum, along with Coinbase, a sole trading partner for multiple Bitcoin ETF applications, also experiencing a significant rise in value.

The Court Ruling and Its Impact

The 2nd DC Circuit Court found the SEC’s rejection of Grayscale’s ETF request to be arbitrary. This victory puts pressure on the SEC to review the Grayscale Bitcoin Trust (GBTC) application for a spot Bitcoin ETF based on the new court ruling. Hence all the other ETF approvals may be impacted by this decision.

However, experts like Jake Chervinsky, Chief Policy Officer of the Blockchain Association, emphasize that while this is a setback for the SEC, approval for an actual spot Bitcoin ETF product might not come this year. The SEC has indicated that it will delay its review and feedback issuance on the broader Bitcoin ETF concept until next year.

1/ Grayscale’s victory over the SEC is *massive.*
It’s very rare for a federal circuit court to find that an agency has violated the APA by acting arbitrarily and capriciously.
The DC Circuit just delivered a huge embarrassment for the SEC.
But the ETF isn’t approved yet 🧵
— Jake Chervinsky (@jchervinsky) August 29, 2023

The Future Outlook

Despite the optimism, the SEC’s timeline for approval might differ from the current legal victory. Rushing the process could suggest political motivations rather than genuine approval. While investors eagerly await a Bitcoin ETF, the timeline could still extend beyond the current ruling’s implications.

But what difference it will make in crypto? Sidelining the negativity, a spot bitcoin ETF lets people invest in bitcoin through a regular stock exchange, without owning the actual bitcoin. This could encourage more institutional investors to join the crypto market. That means more inflow of money into the system and more business. It has the capacity to make any country financially strong.

In the end, while Grayscale’s legal win is a positive development, the process of obtaining approval for an actual spot Bitcoin ETF from the SEC remains complex and may take more time than anticipated.

Source: https://coinpedia.org/news/what-happens-next-for-bitcoin-etfs-after-grayscales-win/