Bitcoin (BTC) enjoyed a solid 6% upside run on Tuesday in the wake of a victory in the US courts for Grayscale Bitcoin Trust.
Grayscale, which is one of the world’s largest holders of bitcoin with more than 3% of circulation under management, has been at the forefront of the long-running battle to secure regulatory approval for spot-bitcoin exchange-traded products.
Securities regulator the Securities and Exchange Commission (SEC) has dogged these ambitions for the past eight years on grounds of fraud and manipulation in the crypto spot markets.
On Tuesday, Circuit Judge Rao determined that this is unlawful.
“This is a monumental step forward for American investors, the Bitcoin ecosystem, and all those who have been advocating for Bitcoin exposure through the added protections of the ETF wrapper,” Grayscale said in an email.
“At this time, the Grayscale team is reviewing the details outlined in the Court’s opinion and will share more information on next steps in the ETF conversion process as soon as practicable.”
In the ruling, the District Court of Columbia attested that the SEC “acted arbitrarily and capriciously by denying the listing of Grayscale’s proposed bitcoin ETP and approving the listing of materially similar bitcoin futures ETPs”.
The District Court of Columbia noted that Grayscale's proposed bitcoin ETP is very similar to the already approved bitcoin futures ETPs in terms of regulatory considerations.
Moreover, “the listing exchanges for Grayscale and the bitcoin futures ETPs have identical surveillance sharing agreements with the CME, on which bitcoin futures trade”.
According to the judge, the SEC failed to adequately explain why it approved the listing of two bitcoin futures ETPs but not Grayscale’s proposed bitcoin ETP.
“In the absence of a coherent explanation, this unlike regulatory treatment of like products is
unlawful. We therefore grant Grayscale’s petition for review and vacate the Commission’s order,” the judge stated.
Though this ruling does not throw open the doors to spot-bitcoin ETFs, it does heap pressure on the SEC to strongly consider applications made by Grayscale, BlackRock (NYSE:BLK), Ark Invest and other major institutions have have their eyes on the spot bitcoin market.
Investors took well to the news, pushing the BTC/USDT pair as high as $28,100 as Tuesday trades progressed.
The pair has cooled somewhat since then, dropping back below $27,400 in this morning’s Asia trading window.
Bitcoin is still trading on a sharp month-on-month discount – Source: tradingview.com
Ethereum (ETH) surged 4.6% higher on the news to break above $1,730 before correcting back to $1,718 at the time of writing.
The blue-chip altcoin space shared in the gains, with the likes of Solana (SOL), BNB, Ripple (XRP), Dogecoin (DOGE) and Polygon (MATIC) all adding low-to-mid single digits.
Global cryptocurrency market capitalisation currently stands at $1.09 trillion, having added 4.15% overnight.
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