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For days, we have been saying that today represents a critical period for crypto investors. The time has come. Today is the deadline for the SEC to appeal the court decision regarding the conversion of GBTC to a spot Bitcoin ETF. So what will happen if the SEC does not appeal the court decision?
SEC and GBTC Case
The US securities regulator SEC must appeal the case it lost today in the D.C. Appeals Court. If it does not appeal, there are two possible outcomes as we have mentioned before. Either it will approve the conversion of GBTC to a spot Bitcoin ETF or it will find a new excuse.
The decision in favor of Grayscale Investments puts pressure on the SEC to reconsider GBTC’s application for conversion to an ETF. Many observers do not believe that the securities regulator will appeal the decision. Grayscale has the full support of its members, and its position is strong. Moreover, the SEC made its biggest mistake by focusing on price speculation. It failed to prove the price speculation difference between a Futures ETF and a Spot ETF. This has closed the door to GBTC’s rejection with old excuses.
Will the Spot Bitcoin ETF Be Approved?
As we said, the SEC has three mandatory options. It must choose one of them. If it requests a review of the decision from the Appeals Court, it is highly likely that it will not get the answer it wants. If it decides not to do that, it will reconsider Grayscale’s proposal to convert Grayscale Bitcoin Trust (GBTC) to a spot Bitcoin ETF, according to the court decision issued in August.
Bloomberg ETF analyst Eric Balchunas explained his predictions as follows;
“We think the possibility of an appeal is remote. But there is always a chance of something else happening.”
Bloomberg ETF analyst James Seyffart said in a separate article that it is unlikely for the SEC to reject with new justifications, but there are ways to delay the approvals. In other words, the SEC will eventually approve it. Let’s remember the letter from four Representatives last month, which stated;
“You cannot justify your current stance in the future. Comply with the court decision for the approval of a Spot Bitcoin ETF and stop resisting.”
Law firm Ropes & Gray shared its prediction about what will happen next, stating that the SEC will find a new argument for rejection. But wait a minute, if the SEC had a stronger argument other than price, why didn’t it use it in the GBTC case? Why didn’t it shatter the hopes of GBTC and strengthen its communication with current applicants by rejecting the existing ETFs with this argument?
According to Bloomberg analysts, the probability of ETF approval this year is 75% and the 2024 predictions are at 95%. If the SEC wants to prolong the process, it can request a new application for GBTC. This way, it buys 8 more months.
