Court to Decide if Grayscale Needs to Resubmit Bitcoin ETF

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  • Grayscale CEO Sonnenshein remains uncertain about whether the company will need to refile its Bitcoin ETF following its victory over the SEC
  • Sonnenshein told Bloomberg that the court will inform them of this within 45 days
  • The federal court win nullifies the SEC’s ETF rejection, prompting re-evaluation without prior grounds

Following its legal triumph over the Securities and Exchange Commission (SEC), Grayscale Investments’ CEO, Michael Sonnenshein, has revealed that he is uncertain about the necessity of re-filing a Bitcoin ETF application, telling Bloomberg that the court will decide on the matter within 45 days. The fallout is still being felt in crypto and wider financial circles as the world digests the importance of this week’s ruling and what it means for Bitcoin.

45-day Wait Ahead?

The victory in federal court for Grayscale over the SEC means that the agency’s rejection of its intended conversion from the Grayscale Bitcoin Trust to a full Bitcoin ETF is vacated. This marks a crucial milestone for Grayscale’s pursuit of launching the first US Bitcoin ETF but does not guarantee an immediate launch. Instead, the court has told the SEC to look at the proposal again, disallowing it from rejection on the same grounds.

Sonnenshein asserted that there should be no further grounds for the SEC to deny such products from entering the market, but it hasn’t received any communication from the SEC since the ruling. GBTC shares surged 17% following the victory, but the discount to its underlying holdings remains at around 18%. Analysts suggest the discount won’t vanish until an official conversion occurs.

He added that the court has up to 45 days to determine whether Grayscale will have to reapply for a Bitcoin ETF, with deadlines for other Bitcoin ETF applications due in the meantime.

Market Analysts Still Unsure

James Seyffart, an analyst at Bloomberg Intelligence, noted that although the market is growing more confident in conversion, doubts about GBTC’s conversion persist due to the SEC’s stance on crypto:

The discount shows that the market is more confident in conversion today than they were a few days ago, but still not completely confident that GBTC will convert. It’s not illogical considering the animus that Gensler and the SEC have shown towards crypto more broadly.

Sonnenshein reaffirmed the company’s commitment to lowering fees upon GBTC’s conversion to an ETF and concluded that cryptocurrency as an asset class is undoubtedly here to stay, highlighting the significance of the legal victory for Grayscale and the broader investment and crypto communities.