What happens if SEC doesn’t appeal Grayscale spot Bitcoin ETF ruling?

The United States Securities and Exchange Commission volition soon scope its deadline to entreaty the tribunal determination that ruled successful favour of Grayscale Investments, forcing the regulator to reappraisal the money manager’s exertion for a spot Bitcoin (BTC) fund.

While galore observers don’t judge the securities regulator volition effort to entreaty the court’s decision, analysts accidental determination could inactive beryllium ways for the SEC to hold support of Grayscale’s spot Bitcoin ETF conversion.

On Oct. 13, the SEC indispensable either entreaty the D.C. Circuit Court of Appeals determination to the U.S. Supreme Court, petition the Appeals Court revisit its ruling, oregon follow the court’s August order and reappraisal Grayscale’s bid to alteration its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.

In an Oct. 12 post responding to an X user's question, Bloomberg ETF expert Eric Balcunas said an entreaty was unlikely, though determination could inactive beryllium different hurdles happening.

“We deliberation [an] entreaty is simply a longshot [...] But there’s ever a accidental of thing other happening.”

Meanwhile, successful a abstracted post, chap Bloomberg ETF expert James Seyffart said that an SEC effort to contradict connected caller grounds was improbable and a “very hard needle to thread” but it could “find ways to support delaying.”

Not officially. SEC could effort to contradict connected caller grounds but arsenic @EricBalchunas, myself, @NYCStein, @SGJohnsson, @NateGeraci and galore others person said. It would beryllium a precise hard needle to thread and we presumption arsenic unlikely. They tin find ways to support delaying though IMO.

— James Seyffart (@JSeyff) October 12, 2023

A September enactment from instrumentality steadfast Ropes & Gray warned the GBTC exertion could beryllium sent backmost for reappraisal to the SEC, giving the regulator different accidental to cull it connected a antithetic basis.

“In this scenario, the caller denial could itself past beryllium taxable to different entreaty by GBTC to the D.C. Circuit,” wrote the firm.

Another hold scenario, according to Ropes & Gray, would beryllium if the New York Stock Exchange has to marque a caller filing to database GBTC — past it is imaginable the SEC could instrumentality up to 8 months to scope a determination connected the ETF.

Related: House committee president threatens SEC seat with subpoena, but not implicit crypto

Currently, astatine slightest 7 spot Bitcoin ETF applications are earlier the regulator for approval.

Despite each being filed with the regulator earlier successful 2023, each person faced delays and pushbacks from the SEC leaving the last support deadlines for astir astir March 2024 oregon later.

However, astir eyes are connected Grayscale’s spot Bitcoin ETF conversion exertion due to the fact that if the SEC approves it — the regulator could conflict to find reasons to sound backmost different applications.

The likelihood of an approved spot Bitcoin ETF this twelvemonth is 75%, according to Bloomberg analysts who updated the likelihood aft Grayscale’s tribunal win. The likelihood leap to a 95% likelihood of support by the extremity of 2024.

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