The SEC is nearing the deadline to challenge Grayscale’s victory in a D.C. Appeals Court on October 13, which could lead to the approval or potential delay of the firm’s Bitcoin ETF bid amounting to $26,867. As the deadline approaches, speculators doubt the SEC’s inclination to contest the court’s ruling, yet analysts suggest alternative avenues for the SEC to impede the approval of Grayscale’s spot Bitcoin ETF transformation.
The impending decision on October 13 presents the SEC with three options: appeal the D.C. Circuit Court of Appeals decision to the U.S. Supreme Court, request a review of the ruling from the Appeals Court, or comply with the court’s August directive to assess Grayscale’s proposal to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
While Bloomberg ETF analyst Eric Balchunas deems an appeal improbable, he acknowledges the potential for unforeseen developments, stating, “We think [an] appeal is a longshot […] But there’s always a chance of something else happening.” Another Bloomberg ETF analyst, James Seyffart, expresses skepticism about the SEC’s attempt to reject the proposal on new grounds, deeming it a challenging endeavor. However, he suggests that the SEC might explore means of prolonging the decision.
A cautionary note from the law firm Ropes & Gray suggests the possibility of the GBTC application being sent back to the SEC for reevaluation, providing another opportunity for rejection on different grounds. In such a scenario, GBTC could appeal the new denial to the D.C. Circuit, further complicating the regulatory landscape.
Ropes & Gray also outlines a potential delay if the New York Stock Exchange needs to file a new application to list GBTC, estimating an eight-month timeline for the SEC to reach a decision on the ETF. Despite the delays and resistance from the SEC, seven spot Bitcoin ETF applications are currently under review, with approval deadlines stretching into March 2024 or later.
The focus remains on Grayscale’s spot Bitcoin ETF conversion application, as its approval could set a precedent for other applications. Bloomberg analysts estimate a 75% likelihood of approval this year, with the odds rising to 95% by the end of 2024 following Grayscale’s legal victory.