Bloomberg ETF Analyst Weighs in as SEC Opts Out of Appealing Grayscale Bitcoin ETF Decision

The United States Securities and Exchange Commission (SEC) has reportedly chosen not to appeal a court ruling that favored Grayscale Investments’ application for a spot Bitcoin ETF. This news comes amid growing anticipation for precise regulation in the rapidly expanding crypto space. 

According to Bloomberg ETF analyst James Seyffart, dialogue between Grayscale and the SEC could begin early next week, shedding more light on the path forward.

What This Means for Grayscale and Bitcoin ETFs

The SEC’s decision not to appeal indicates a reluctant acceptance of Grayscale’s court win, which may serve as a precedent for other spot Bitcoin ETF applications currently awaiting review. Seyffart points out that the SEC would find it “a very difficult needle to thread” if it sought to deny the application on new grounds.

Seyffart’s analysis seems to align with the general market sentiment. Following Grayscale’s victory, Bloomberg analysts updated their odds, stating that there’s a 75% likelihood of a spot Bitcoin ETF receiving approval this year and a 95% likelihood by the end of 2024.

The ProShares Update: A Twist in Ethereum Futures

In a parallel development, ProShares is set to launch a short Ethereum Futures ETF, scheduled for trading on October 16th under the ticker $SETH. Seyffart notes that the SEC has accelerated all of the long/traditional Ethereum futures ETFs but left this ProShares ETF to go effective on its expected date.

While the news is promising, it’s important to note that there are still possible avenues for delay. Legal experts at Ropes & Gray suggest that the SEC could send the GBTC application back for review, giving it another chance to be rejected on different grounds. Moreover, should the New York Stock Exchange require a new filing to list GBTC, the SEC could take up to eight months to decide.

The SEC’s apparent decision not to appeal Grayscale’s court victory marks a potential turning point in cryptocurrency ETF approvals. James Seyffart’s insights provide a glimpse into the inner workings of SEC decision-making and suggest a more amenable future for cryptocurrency-based financial products. While hurdles may remain, the floodgates for Bitcoin ETFs may soon swing wide open, forever altering the investment landscape.