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Today, Aug 29th – District of Columbia Court of Appeals in Washington has ruled the lawsuit in favor of Grayscale against The US Securities and Exchange Commission (SEC) over the proposal of a Spot Bitcoin ETF.
Grayscale Investments had submitted a proposal to create a spot Bitcoin ETF. This proposal was rejected by the SEC on the grounds that the ETF was not “designed to prevent fraudulent and manipulative acts and practices”. Grayscale sued the SEC for this and the district court today ruled the judgement in Grayscale’s favor.
How did the market react to Grayscale Lawsuit win?
The crypto market reacted extremely positive to the news of favorable judgement towards Grayscale.
Bitcoin jumped 7.5% instantly as the news came out.
Another popular cryptocurrency Ethereum jumped over 5.7% and the results are similar across the board in the Crypto market.
What is a Bitcoin ETF?
An ETF (Exchange Traded Fund) is a pooled investment security that can be traded on a particular exchange. An ETF tracks an underlying asset (Bitcoin in this case) very much like a mutual fund. The only difference is that an ETF can be bought or sold on that exchange where as the mutual funds cannot be bought or sold like an index.
In this particular case, Grayscale wanted to offer this Bitcoin ETF to its investors so that they can get exposure to Bitcoin without having to go on a crypto exchange or making a crypto wallet.
Why is Bitcoin ETF Important?
A Bitcoin ETF will make Bitcoin much more mainstream as traders who are on the fence about making a crypto wallet and changing the way they have traded or invested in the legacy market, will now have access to Bitcoin from their existing exchange.
A bigger user base means more investment coming into an asset and much better chance of that asset to rise in price.
This has happened earlier with Gold. In 2004, when Blackrock got its Gold ETF approved, Gold prices soar 350% just after that.
Its safe to say when Bitcoin ETF gets approved, it wont be surprising for most people that Bitcoin makes a similar move in its price.
What Next on Bitcoin ETF?
This victory for Grayscale signifies the reopening of discussions about a Bitcoin ETF. While the ETF’s approval is still pending and might require some time, today’s decision maintains a hop for its potential realization in the near future.
Checkout Grayscale’s $16 Billion Bitcoin Trust on their official page.
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