In a significant development for the cryptocurrency market, the price of bitcoin surged on Tuesday following a ruling by the U.S. Court of Appeals for the DC Circuit. The court ruled that the Securities and Exchange Commission (SEC) was mistaken in denying Grayscale, a major crypto investment firm, permission to convert its widely-used bitcoin trust into an exchange-traded fund (ETF).
Bitcoin witnessed a remarkable 7.15% increase in value to reach $27,851.82 shortly after the court’s decision, as reported by Coin Metrics. This surge not only boosted the cryptocurrency itself but also had a positive impact on the broader cryptocurrency market and crypto equities.
Grayscale’s lawsuit against the SEC has been closely monitored by investors and industry participants alike. This ruling is seen as a significant catalyst that could disrupt a market characterized by low volatility and liquidity. The recent decline in bitcoin’s trading volatility, reaching its lowest point in over four years, indicated that investors had been awaiting regulatory clarity before committing to crypto activities.
The court’s ruling criticized the SEC’s handling of Grayscale’s proposal, highlighting inconsistency in its regulatory approach. While the Commission approved the listing of two bitcoin futures exchange-traded products (ETPs), it had rejected Grayscale’s proposed bitcoin ETP without sufficient explanation. The court deemed this differential treatment unlawful and granted Grayscale’s petition for review, vacating the SEC’s initial order.
This ruling is expected to have ripple effects on other pending bitcoin ETF applications awaiting SEC approval. Prominent firms like BlackRock, Fidelity, WisdomTree, VanEck, and Invesco have filed for bitcoin ETFs. The court’s decision increases the likelihood that the SEC may greenlight these applications, potentially introducing a new channel for investors to gain exposure to bitcoin without directly holding the cryptocurrency.
The SEC, in response to the ruling, stated that it is currently reviewing the court’s decision to determine the next steps in this matter.
Steve Kurz, the Global Head of Asset Management at Galaxy, expressed optimism about the ruling’s impact on the cryptocurrency market. He noted, “Today’s decision reaffirms that a bitcoin ETF in the U.S. is a matter of when, not if.” Kurz believes that ETFs can enhance accessibility and transparency in cryptocurrency investing, making the asset class more accessible to a wider range of investors.
The court’s ruling also brings relief to crypto market participants who have been frustrated by the SEC’s regulatory approach under Chair Gary Gensler. The crypto
