SEC’s Decision on GBTC Transformation: What It means for Bitcoin ETF

Last Friday (Oct. 13) marked the deadline for the U.S. Securities and Exchange Commission (SEC) to make a crucial decision regarding the Grayscale Bitcoin Trust (GBTC) and its potential transformation into a spot Bitcoin ETF. 

The SEC had three options: to appeal the D.C. Circuit Court of Appeals' decision to the U.S. Supreme Court, request a reconsideration of the Appeals Court's ruling, or comply with the court's August directive to review Grayscale's proposal.

As reported by Bloomberg, an insider source revealed that the SEC has opted not to pursue an appeal. 

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To recap, in August, the D.C. Circuit Court of Appeals ruled that the SEC's rejection of Grayscale Investment's application to convert GBTC into an ETF was unjust and arbitrary. The court emphasized that federal agencies must treat similar cases consistently.

The SEC's decision aligns with my expectations. For months, I’ve speculated that the SEC would collaborate with issuers to refine their documents for a potential launch in early 2024.

SEC’s Decision on GBTC Transformation: What It means for Bitcoin ETF.

What comes next?

It appears that this matter is settled without the need for further en banc application.

As such it seems unlikely that the SEC will take the case to the Supreme Court.

Expect discussions between Grayscale and the SEC to commence in the coming weeks with more information on the next steps to come shortly thereafter.

Still, there remains a chance that regulators could introduce delays and perpetuate their scrutiny of the cryptocurrency industry. According to law firm Ropes & Gray, the GBTC application might be sent back to the SEC for another round of review, potentially offering the regulator a fresh opportunity to reject it on different grounds. In this scenario, GBTC could lodge another appeal with the D.C. Circuit.

Another potential delay may occur if the New York Stock Exchange is required to file a new application to list GBTC, potentially causing the SEC to take up to eight months to reach a decision on the ETF.

Despite these potential delays, Bloomberg analysts estimate a 75% likelihood of an approved spot Bitcoin ETF this year, and this probability may have increased significantly following Grayscale's August legal victory. The odds were previously adjusted to a 95% likelihood of approval by the end of 2024.

Fake Bitcoin ETF News

On Monday, Cointelegraph falsely reported that the SEC approved Blackrock's iShares spot Bitcoin ETF, causing Bitcoin's price to surge by over 10%. 

However, this news was baseless, and Blackrock confirmed it was false, stating their ETF application was still under review. Bloomberg's ETF expert also labeled Cointelegraph's report as "fake news." Following the revelation, Bitcoin's price dropped below $28,000 per coin.

Bitcoin's price dropped below $28,000 per coin.

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Cointelegraph apologized for the inaccurate information, removed the posts, and initiated an internal investigation. Interns had better be careful! 

The incident highlights the potential impact of real approval on cryptocurrency markets. In short, the eventual approval of this ETF is going to send Bitcoin soaring. 

And the truth is that the Gensler-led SEC is likely going to delay this ETF until the last minute – which is March 2024 – right before the Bitcoin halving.

Gensler-led SEC is likely going to delay this ETF until the last minute – which is March 2024 – right before the Bitcoin halving

Readers of Crypto Cycle know that this event is historically bullish for Bitcoin and the entire cryptocurrency market. Combined with a spot Bitcoin ETF approval and other bullish catalysts, 2024-2025 is shaping up to be incredibly profitable for people who invest now. 

Find out what I’m buying to take advantage of this upcoming crypto bull market.

Chris Curl

Chris Curl
Editor, Daily Profit Cycle