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The District of Columbia Court of Appeals has paved the way for Bitcoin Exchange Traded Funds.
On Tuesday, a court upheld Grayscale in a lawsuit against the Securities and Exchange Commission that rejected the company’s application to convert the Grayscale Bitcoin Trust into an ETF. The decision could have implications for other companies wishing to create Bitcoin ETFs. black rock and fidelity.
Spot Bitcoin ETFs allow investors to gain exposure to the world’s largest cryptocurrency without holding physical tokens. Many crypto bulls believe the approval of spot bitcoin ETFs will lead to more mainstream institutional adoption.
Bitcoin, etherand other major cap cryptocoins surged on the news, coin basehas been listed as a custodian partner for multiple spot bitcoin ETF applications and rose more than 14% on Tuesday.
Grayscale Investments, which manages the world’s largest crypto fund, filed a lawsuit against the SEC in June 2022 after the SEC denied an application to convert its flagship Bitcoin fund, better known by the ticker GBTC, into an ETF. Ta. Following the SEC’s approval of ProShares’ futures-based Bitcoin ETF in October 2021, the company has decided to pursue a Bitcoin-backed ETF rather than a Bitcoin derivative.
After several delays, the SEC ultimately dismissed the petition last summer, citing Grayscale’s failure to answer questions related to market manipulation and investor protection concerns.
A Grayscale spokesperson said Tuesday’s ruling was “a monumental step forward for U.S. investors, the bitcoin ecosystem and all those who have claimed bitcoin exposure through additional protections for ETF wrappers.” Stated.
“The Grayscale team and our legal counsel are actively considering the details outlined in the Court Opinion and plan to pursue next steps with the SEC. We will share,” the written statement continued.
With $16 billion in assets under management as of Tuesday, GBTC has become the first crypto product that allows investors to trade in a brokerage account and touch Bitcoin. Founded in 2013, long before the approval of Bitcoin ETFs in Canada and Bitcoin futures ETFs in the United States, Grayscale charges investors a 2% annual fee and is owned by Barry Silbert-led parent company Digital. It has become a cash cow for currency groups.
“This virtually guarantees that they endorse BlackRock and Fidelity,” said Coinroots, a platform that offers algorithmic trading and integrated market data products for digital assets across multiple exchanges and liquidity providers. CEO Dave Weisberger said. “Grayscale may also need to be resubmitted, but will almost certainly be approved.”
Companies have been applying for spot bitcoin ETFs for more than two years, but so far the SEC has rejected more than 30 proposals from 2021 onwards, with a rejection rate of 100%. But investor sentiment soared when BlackRock, the world’s largest asset manager with about $9 trillion in assets under management, filed in June. The company has received all but one of its 575 ETF applications to date.
— CNBC’s Jordan Smith contributed to this report.
