Crypto assets soar as US court clears a path for bitcoin ETFs
Several crypto assets surged Tuesday after a US court approved the first bitcoin ETF.
Despite the SEC’s attempts to rein in the digital asset industry, the ruling is a breakthrough moment for crypto investors.
A three-judge panel for the DC Court of Appeals overturned an SEC decision denying Grayscale Investments permission to launch a bitcoin-focused ETF. In its ruling, the panel said the regulator had not adequately explained its rejection of the firm’s application.
Grayscale’s proposal was denied arbitrarily and capriciously because the Commission failed to explain its different treatment of similar products.
According to an SEC spokesperson, the agency is reviewing the court’s decision to determine its next steps.
As a result of the news, major crypto tokens surged. Over the past few weeks, Bitcoin prices have been particularly volatile, rising nearly 7% to nearly $28,000. The biggest publicly traded crypto exchange in the US, Coinbase (COIN), increased by 15%.
Grayscale Bitcoin Trust, or GBTC, the fund at the center of the case, was up 17%.
Grayscale argued that its proposal was materially similar to other bitcoin investment products already approved by the SEC. Two other bitcoin products, from Valkyrie and Teucrium, are futures contracts on the Chicago Mercantile Exchange. Judges wrote that Grayscale had presented “uncontested evidence” that bitcoin and bitcoin futures were virtually identical.
This ruling opens the door to an investment product that investors have been clamoring for for a long time.