As Bitcoin and the crypto industry are potentially at a significant moment, the DC Circuit Court of Appeals is expected to make a decision this week regarding the lawsuit filed by Grayscale Investments against the U.S. Securities and Exchange Commission (SEC). The lawsuit is related to Grayscale’s proposal to convert its Bitcoin trust into a spot Bitcoin exchange-traded fund (ETF).
Is the Grayscale Bitcoin Spot ETF Decision Coming This Week?
James Seyffart, an analyst at Bloomberg, expressed his views on the possible decision date by referring to the timeline of the Bitcoin spot ETF on Twitter, saying “Tomorrow 8/15.” The account schedule specifies August 15th for the decision in the lawsuit between Grayscale and the SEC.
8/15 has been my theoretical Grayscale case decision date for a while, but it’s really just an educated guess. I haven’t done a detailed analysis on court decisions like Scott Johnsson did. But I did some and also talked to Elliott Z. Stein about the timelines.
Elliott Z. Stein, Bloomberg’s renowned litigation analyst, responded humorously to Seyffart’s comments:
I hope both of you are wrong because I won’t have any money left in my pocket after 10:30 tomorrow morning.
Seyffart’s cheerful response was as follows:
Message Srinivasan right away. If it’s scheduled for tomorrow, if you politely ask, I’m sure he’ll wait for you for at least a few days. That’s how things work there. Right.
Scott Johnsson, a finance attorney at Davis Polk, highlighted the fact that “out of the 32 cases heard in March ’21/’22, 30 were decided within 160 days after oral arguments.” He delved into the matter. Since Grayscale’s oral arguments took place 160 days ago in March 2023, the timeline is noteworthy.
Johnsson also emphasized the importance of August; this period is usually when law clerks transition and judges have to handle pending cases “before the incoming group takes office.”
In addition, Johnsson observed that “almost all of the March 2022 cases submitted to the DC Circuit were resolved within 154 days, with only one exception of 170 days.” As of now, 160 days have passed since the presentation of Grayscale’s case on Tuesday, August 15th, and only a few more March cases are still awaiting a decision.
Critical Date: Tuesday or Friday?
Eric Balchunas, a senior ETF analyst at Bloomberg, also joined the discussion and added another dimension. According to him, the decision could be announced at 11:00 EST because the court usually announces decisions around that time.
Most likely, we will learn about the Grayscale SEC outcome around 11 tomorrow. Only a small portion of the cases have taken longer for a decision to be reached. So, the possibilities are quite high. Obviously, we might not hear it. But that would make this case a little bit more of an outlier.
Balchunas acknowledged Johnsson’s legal acumen and mentioned that there are two important days for the Grayscale decision this week:
Tuesday and Friday, both at 11. Scott, who has more legal intelligence than me, likes this Friday. (These cases are announced on Tuesdays and Fridays at 11). It’s time to stay awake in both cases.
Grayscale’s lawsuit against the SEC stems from the regulatory agency’s rejection of the company’s application to convert its GBTC into a spot Bitcoin ETF in June 2022. Grayscale argued that the SEC acted arbitrarily by not applying consistent treatment to similar investment vehicles. Industry commentators at Bloomberg expressed optimism about Grayscale’s chances of winning the case.
According to the report, Grayscale recently advocated for the SEC to approve all Bitcoin spot ETF applications simultaneously, thus ensuring that no company gains an unfair advantage over others. As of the time of writing, the price of Bitcoin was at $29,300 and appeared unaffected by speculations.
