Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), has recognized the critical role of Grayscale’s court victory in the approval of spot Bitcoin exchange-traded funds (ETFs). During a recent interview with CNBC’s Squawk Box, Gensler noted the significance of the August 2023 court decision in favor of asset manager Grayscale, which substantially altered the SEC's stance on the crypto investment vehicle.
This acknowledgment comes despite the SEC's history of rejecting several applications for spot Bitcoin ETFs since 2013. Gensler emphasized his deep belief in the rule of law and the necessity of respecting court decisions. He stated, “We had disapproved a number of these [applications for a spot Bitcoin ETF] over the years, and something had changed. Taking a new court decision into consideration, we move forward. I think this is the most sustainable path forward.”
It's important to note that Gensler reiterated the approval does not equate to an endorsement of Bitcoin. The SEC's decision is not an endorsement of the cryptocurrency.
In June 2022, the SEC had denied Grayscale’s application for the conversion of its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF, citing concerns that the product was not designed to prevent fraudulent and manipulative acts and practices. However, following Grayscale's successful petition for review with the United States Court of Appeals for the District of Columbia Circuit, the court ruled in favor of Grayscale on August 29, 2023. The court found the SEC's legal ground for denying the application insufficient and ordered the case to return to the commission for review.
This legal victory was significant for Grayscale, leading to the SEC’s approval of 10 ETFs holding Bitcoin as their underlying asset on January 10. The inaugural trading session was marked by substantial activity, with Grayscale’s GBTC accounting for $2.3 billion in trade volume, nearly half of the overall $4.5 billion volume on the day.
BlackRock’s iShares Bitcoin Trust (IBIT) ranked second in trading volume at approximately $1 billion. BlackRock CEO Larry Fink, also speaking with CNBC’s Squawk Box, expressed his belief in cryptocurrency as an asset class, though not as a currency.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
