SEC Opts Not to Appeal, Grayscale’s Spot Bitcoin ETF Moves Forward

The United States Securities and Exchange Commission (SEC) has reportedly chosen not to appeal the recent court decision that favored Grayscale Investments. This significant ruling mandates the SEC to undergo a thorough review of the firm’s spot Bitcoin exchange-traded fund (ETF) application.

Per a report from Reuters on October 13, an inside source confirmed the SEC’s decision not to contest the U.S. Court of Appeals for the District of Columbia Circuit’s verdict. This marks a crucial development in the ongoing saga surrounding Grayscale’s pursuit of a spot in Bitcoin ETF.

Grayscale’s Bitcoin ETF Review Initiated

Analysts from Bloomberg have acknowledged the SEC’s choice not to appeal to the Supreme Court. However, they clarify that this decision doesn’t necessarily translate into immediate approval for Grayscale’s ETF application.

Should these reports hold, the SEC will be required to follow the court’s directive, which stems from an August order, instructing them to review Grayscale’s application. This application seeks to transform the Grayscale Bitcoin Trust into a spot Bitcoin ETF.

However, Reuters suggests that the appeals court is anticipated to issue a precise mandate outlining the steps the SEC must take to execute the ruling in accordance with the law.

James Seyffart, an ETF analyst at Bloomberg, expressed his insights via Twitter, stating, “I do not think they will appeal to the Supreme Court either. Dialogue between Grayscale and SEC should begin next week. Hoping for more info on the next steps sometime next week or the week after?”

1. Done deal I guess if this is accurate. No en banc application

2. No. I do not think they will appeal to the Supreme Court either.

3. Dialogue between Grayscale and SEC should begin next week. Hoping for more info on next steps sometime next week or week after? https://t.co/2EayzqeKGq

— James Seyffart (@JSeyff) October 13, 2023

Seyffart further hinted that the SEC may disclose the deadline for approving or denying Grayscale’s spot Bitcoin ETF application in the coming week or two. However, if the SEC denies the application, Grayscale retains the option to appeal, extending the timeline for this process.

Notably, the SEC currently has around seven spot Bitcoin ETF applications under review, all awaiting the regulator’s decision.  On October 13, Seyffart maintained a 90% chance for a January 2024 Bitcoin ETF approval. He specifically pointed to Cathie Wood’s ARK Invest as a prime contender.

Seyffart and Eric Balchunas, Bloomberg’s senior ETF analyst, had previously suggested a 75% chance of an ETF application receiving approval in 2023. These analysts maintain optimism for a soon-to-be-approved spot Bitcoin ETF.

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