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Grayscale wins against SEC, GBTC the first spot Bitcoin ETF?

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Grayscale, the company behind the Grayscale Bitcoin Trust (GBTC) has achieved a significant triumph over the U.S. Securities and Exchange Commission (SEC)

The case was aimed at transforming its over-the-counter GBTC application into a Bitcoin ETF listed on the stock exchange. 

Grayscale Investments is a US-based firm that offers cryptocurrency investment products like trusts, allowing people to buy shares representing ownership in cryptocurrencies. 

These shares are traded on stock exchanges, providing regulated crypto exposure for investors.

Grayscale Bitcoin Trust (GBTC) is a crypto investment product offered by Grayscale Investments. It allows investors to buy shares representing ownership in Bitcoin. 

These shares are traded on stock exchanges, providing a way to invest in Bitcoin through traditional financial channels.

The recent court filings on August 29 reveal that U.S. Court of Appeals Circuit Judge Neomi Rao has granted Grayscale’s petition for review. 

Consequently, the SEC’s prior order, which denied the GBTC listing application, has been nullified by the court’s decision. 

Grayscale has always wanted to start offering spot Bitcoin ETF products to its users. A Bitcoin ETF is a financial product that tracks the price of Bitcoin. 

It lets investors buy and sell shares on stock exchanges, providing an indirect way to invest in Bitcoin’s price movements without owning the cryptocurrency directly.

While the US SEC has approved futures Bitcoin ETFs, it has not given a yes to any spot version. 

Spot Bitcoin ETFs provide exposure to the current value of Bitcoin itself, while futures Bitcoin ETFs provide exposure to anticipated future price movements through derivative contracts.

Aside from GBTC, other firms such as BlackRock, Invesco, WisdomTree, and Valkyrie have applied for the same product. 

However, the SEC insists that details of the applications were not sufficient for approval. This drove the companies to reapply yet it has yielded no result.

As per today’s judgment, it is noted that the U.S. Court of Appeals Circuit Judge Neomi Rao directed the approval of Grayscale’s review petition. 

This action nullified the SEC’s decision to deny the GBTC listing application. In addition, Judge Rao criticized the SEC for not providing any explanation for its stance against Grayscale.

Today’s court ruling is seen as a step towards the release of the first spot Bitcoin ETF. But the question remains, will GBTC be granted the full approval to do so?

Read also; 66yr-old Thai retiree falls victim to crypto scam, loses $568k

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