The U.S. Court of Appeals for the DC Circuit has ruled that the SEC was unreasonable to deny Grayscale’s application to launch a Bitcoin ETF.
The ruling, which came after the SEC rejected crypto giant Grayscale’s latest bid to launch a Bitcoin ETF last October, opens the door to a potentially huge amount of new capital flowing into crypto markets.
While retail consumers and hedge funds have invested in Bitcoin for more than a decade, pension funds and other big players have largely stayed on the sidelines, in part because corporate by-laws restrict what they may invest in on behalf of their customers.
The introduction of a Bitcoin packaged in the familiar financial wrapper of an ETF is widely expected to wipe away such legal and reputational concerns among conservative investors, and lead to massive boost in liquidity for the crypto markets.
The ruling is a major victory for Grayscale, which has been lobbying the SEC for years to approve a Bitcoin ETF. The company has argued that a Bitcoin ETF would provide investors with a more secure and regulated way to access the cryptocurrency.
The SEC has been reluctant to approve a Bitcoin ETF, citing concerns about market manipulation and the lack of a reliable price discovery mechanism. However, the court’s ruling suggests that the SEC may be more willing to approve a Bitcoin ETF in the future.
The ruling is also a positive sign for the broader crypto market. The approval of a Bitcoin ETF would likely lead to a surge in demand for Bitcoin, which could boost prices and attract more institutional investors to the space.
Bitcoin is up 5.6% on the news
The price of Bitcoin has surged 5.6% in the hours following the court’s ruling. The cryptocurrency is now trading at around $22,000, its highest level in over a month.
The ruling is a major victory for the crypto community and is likely to have a significant impact on the future of the market. It remains to be seen whether the SEC will appeal the decision, but if it does not, it is likely that we will see a Bitcoin ETF approved in the coming weeks.