{"id":58065,"date":"2023-08-30T08:30:10","date_gmt":"2023-08-30T12:30:10","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=58065"},"modified":"2023-08-30T08:30:12","modified_gmt":"2023-08-30T12:30:12","slug":"grayscale-bitcoin-trust-surges-after-court-victory-over-sec","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/grayscale-bitcoin-trust-surges-after-court-victory-over-sec\/","title":{"rendered":"Grayscale Bitcoin Trust Surges After Court Victory Over SEC"},"content":{"rendered":"\n

Grayscale Bitcoin Trust (GBTC)<\/a>, the largest bitcoin investment vehicle in the world, saw its share prices soar by 17% after a favorable court ruling against the U.S. Securities and Exchange Commission (SEC) over its bid to convert to a spot bitcoin ETF.<\/p>\n\n\n\n

\"Grayscale<\/figure>\n\n\n\n

This is the latest development in the long-awaited quest for a bitcoin ETF<\/a> in the U.S. market.<\/p>\n\n\n\n

Currently, there are no spot bitcoin ETFs approved by the SEC in the U.S., although several applications are pending review.<\/p>\n\n\n\n

The SEC has only approved bitcoin ETFs that track bitcoin futures contracts, which are derivatives that trade on regulated exchanges like the Chicago Mercantile Exchange (CME). <\/a><\/p>\n\n\n\n

These futures-based bitcoin ETFs have higher fees and lower liquidity than spot bitcoin ETFs and may not reflect the true price of bitcoin.<\/p>\n\n\n\n

\n

After yesterday's decision in favor of Grayscale, shares of bitcoin trust $GBTC\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a> rose by 17%.

The trading session was the busiest in the last 14 months – the daily volume amounted to $19.5 mln. pic.twitter.com\/J3yMRyiEo9<\/use><\/svg><\/span><\/a><\/p>— Sjuul | AltCryptoGems (@AltCryptoGems) August 30, 2023<\/use><\/svg><\/span><\/a><\/blockquote>

How Did Grayscale Win Against the SEC?<\/h3>\n\n\n\n

Grayscale Bitcoin Trust is currently operating as a closed-end fund, which means that it issues a fixed number of shares that trade on the secondary market. <\/p>\n\n\n\n

This structure makes it prone to large deviations from its net asset value (NAV),<\/use><\/svg><\/span><\/a> which is the value of the underlying bitcoin holdings per share. <\/p>\n\n\n\n

As of August 29, GBTC was trading at an 18%<\/strong> discount to its NAV, meaning that investors were paying less than the actual value of the bitcoin in the fund.<\/p>\n\n\n\n

Grayscale has been seeking to convert its GBTC product to a spot bitcoin ETF since 2016 but has faced repeated rejections from the SEC. <\/p>\n\n\n\n

However, on August 29, the U.S. Court of Appeals for the District of Columbia Circuit<\/use><\/svg><\/span><\/a> handed Grayscale a win over the SEC, ruling that the regulator had acted arbitrarily and capriciously in denying its application.<\/p>\n\n\n\n

According to the court, the SEC had no valid reason to treat futures-based and spot-based bitcoin products differently, as they were similar in nature. <\/p>\n\n\n\n

The court ordered the SEC to apply the same standards to both types of products. <\/p>\n\n\n\n

Moreover, the court pointed out that the SEC had ignored Grayscale\u2019s claims that a spot bitcoin ETF would be more advantageous and less risky for investors than a futures-based one. <\/p>\n\n\n\n

The court sent the case back to the SEC for further review, allowing Grayscale to continue its quest for a spot bitcoin ETF conversion.<\/p>\n\n\n\n

The court\u2019s decision also sets a precedent for other spot bitcoin ETF applicants, who may use it as leverage against the SEC.<\/p>\n\n\n\n

What Does This Mean for GBTC and Bitcoin?<\/h3>\n\n\n\n

The news of Grayscale\u2019s court victory boosted GBTC\u2019s share prices by 17%,<\/strong> reaching $20.56<\/strong> on August 29. This was the highest level since July 2021, when GBTC traded at $21.64. <\/strong><\/p>\n\n\n\n

The rally also narrowed GBTC\u2019s discount to NAV, which had reached as high as 50%<\/strong> in December 2020.<\/p>\n\n\n\n

The increased demand for GBTC also reflected positively on bitcoin\u2019s price, which rose by over 5% <\/strong>on August 29, reaching $27,450. <\/strong><\/p>\n\n\n\n

Bitcoin <\/use><\/svg><\/span><\/a>has been recovering from a slump in July when it dipped below $20,000 <\/strong>amid regulatory crackdowns and environmental concerns.<\/p>\n\n\n\n

Many analysts and investors are optimistic that Grayscale\u2019s court win will pave the way for a spot bitcoin ETF approval in the U.S., which could bring more institutional and retail money into the cryptocurrency space. <\/p>\n\n\n\n

According to Bloomberg Intelligence,<\/use><\/svg><\/span><\/a> a spot bitcoin ETF could attract as much as $50 billion<\/strong> in assets in its first year.<\/p>\n\n\n\n

However, some experts caution that Grayscale\u2019s victory does not guarantee a spot bitcoin ETF approval and that the SEC may still impose additional requirements or delays on Grayscale and other applicants. <\/p>\n\n\n\n

Bespoke Investment Group warned that \u201ca single day\u2019s movement doesn\u2019t establish a trend\u201d<\/em> and that investors should be prepared for more volatility and uncertainty in the crypto market.<\/p>\n","protected":false},"excerpt":{"rendered":"

Grayscale Bitcoin Trust (GBTC), the largest bitcoin investment vehicle in the world, saw its share prices soar by 17% after a favorable court ruling against the U.S. Securities and Exchange Commission (SEC) over its bid to convert to a spot bitcoin ETF. This is the latest development in the long-awaited quest for a bitcoin ETF […]<\/p>\n","protected":false},"author":44,"featured_media":58069,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[1613,12177,812,1138],"class_list":["post-58065","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bitcoin-etf","tag-gbtc","tag-grayscale-bitcoin-trust","tag-markets"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/08\/GBTC-1-1.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/58065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=58065"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/58065\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/58069"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=58065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=58065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=58065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}