Grayscale victory and BlackRock listing bring bitcoin ETFs closer to reality
Published: 08:09 24 Oct 2023 BST
The DC Court of Appeals has finalised Grayscale's victory over the US Securities and Exchange Commission (SEC), mandating the SEC to reconsider its initial rejection of Grayscale's proposal to transform its bitcoin closed-ended trust into an exchange-traded fund (ETF).
Grayscale, the world's largest bitcoin investment vehicle, has been in a prolonged dispute with the SEC over its ambition to list as a spot ETF on the US equities market.
Such a listing would allow bitcoin to be traded on public exchanges, potentially leading to a groundswell of institutional investment in the digital cryptocurrency asset.
The SEC, under chair Gary Gensler, has consistently opposed Grayscale's efforts, citing concerns about potential market manipulation and fraud associated with spot-based bitcoin ETFs.
But the latest ruling kicks the issues back to the SEC, where the regulator has the option to approve the listing or reject it on other grounds.
In August, Judge Neomi Rao called the SEC’s initial rejection “arbitrary and capricious", given that futures-based bitcoin ETFs have been permitted even though they come with counterparty risk that the spot markets don’t.
“The Grayscale team looks forward to continuing to work constructively with the SEC to convert GBTC to an ETF,” Grayscale spokeswoman Jennifer Rosenthal said in a statement. “GBTC is operationally ready, and we intend to move as expeditiously as possible on behalf of our investors.”
Adding to the hype surrounding spot bitcoin ETFs, BlackRock's iShares Bitcoin Trust has just been listed on the Depository Trust & Clearing Corporation (DTCC), the entity responsible for clearing Nasdaq trades.
The iShares Bitcoin Trust has been listed on the DTCC (Depository Trust & Clearing Corporation, which clears NASDAQ trades). And the ticker will be $IBTC. Again all part of the process of bringing ETF to market.. h/t @martypartymusic pic.twitter.com/8PQP3h2yW0
— Eric Balchunas (@EricBalchunas) October 23, 2023
Though there is still the possibility that the SEC will hold its ground and continue to throw up roadblocks, the crypto markets have been sent into a frenzy, with bitcoin soaring to a 17-month high on Tuesday morning.
