Bitcoin spikes to $27.6k after Grayscale’s win against SEC

August 30, 2023 02:55 AM AEST | By Invezz

Bitcoin spikes to $27.6k after Grayscale’s win against SEC — Image source: Invezz

Court rules in favour of Grayscale

After a few delays over the past two weeks, the Federal Court on Tuesday, August 29 ruled in favour of Grayscale in an appeal the crypto firm filed against the SEC. The court’s ruling in Grayscale’s petition is that the SEC has to review the application that sought to convert the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.

BREAKING: There it is, @Grayscale wins their lawsuit against the SEC. DC Circuit court of appeals is vacating SEC's denial of $GBTC's conversion into an ETF. pic.twitter.com/gqFvMpmfnm
— James Seyffart (@JSeyff) August 29, 2023

According to the court, SEC’s denial of Grayscale’s GBTC to spot Bitcoin ETF was arbitrary and capricious, with the government agency failing to apply the “fundamental principle of administrative law that agencies must treat like cases alike.” In particular, the regulator failed to adequately explain why they approved two bitcoin futures ETFs but denied Grayscale’s proposal.

Circuit Judge Rao wrote:

“The Commission’s unexplained discounting of the obvious financial and mathematical relationship between the spot and futures markets falls short of the standard for reasoned decisionmaking.”

In granting Grayscale’s petition, the court vacated the SEC’s order, with this another blow to the SEC after the July ruling that declared XRP not a security.

ETF analyst comments on what next?

According to ETF analyst James Seyffart, the DC Circuit court’s decision does not translate to GBTC automatically converting into a spot Bitcoin ETF. However, he opines that the ruling does bring “things one step closer.”

The ruling means the SEC will now have to issue a new order, with a timeline then coming into view. Sayffart says it’s not yet clear what the deadlines would be.

The post Bitcoin spikes to $27.6k after Grayscale’s win against SEC appeared first on Invezz.

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