The Securities and Exchange Commission’s decision not to appeal Friday a Grayscale Investments court victory could be an indication that spot Bitcoin ETF approval will soon come.
Recent amendments made to bitcoin ETF proposals — that some analysts believe are at the request of the US securities regulator — also appear to reflect progress.
In August, judges in the DC Circuit Court of Appeals ruled the SEC’s July decision that it would block Grayscale Bitcoin Trust’s (GBTC) conversion to an ETF while allowing futures bitcoin ETFs begin trading was unconstitutional. “arbitrary and capricious.”
US Securities regulators had until this Friday to appeal the court’s decision. They could do so by requesting an appeal at the US Supreme Court, or they can request an “en banc” The Court of Appeals panel will review the decision.
They chose to ignore them.
Un spokesperson from the SEC refused to comment.
“GBTC remains operationally ready to convert to an ETF upon appropriate regulatory approvals,” Grayscale’s spokesperson spoke to Blockworks at Blockworks last Friday.
Blockworks was told by a number of observers in the industry that they were not expecting an appeal from SEC. Some observers have pointed out, however, the SEC could request Grayscale to resubmit a proposal or look to stop GBTC’s conversion into an ETF based on different reasons.
SEC must still decide on several other applications. The SEC has a 240 day window to make a decision on if it will approve ARK Invest’s and 21Shares’ spot bitcoin ETF. This deadline is Jan. 10th.
It is likely that the final deadline to comment on BlackRock’s plans, Fidelity’s and those of other firms will be two months from now, although decisions could come as early as January.
Nate Geraci of The ETF Store tweeted on Thursday that it was Friday. “basically spot bitcoin ETF approval day” According to him, this is what could happen.
“If [the] SEC doesn’t appeal [the] court decision in Grayscale case (I don’t expect them to), then it’s game on,” He predicted correctly, as he wrote in the blog. “Basically [it’s] just [a] matter of time from there. Still thinking [January] 2024 launch.”
What is the bullishness of filing amendments?
It appears that the SEC has decided to not challenge the Court of Appeals decision after this week’s refinement of issuers’ bitcoin ETF proposal.
Bloomberg Intelligence analysts James Seyffart and Eric Balchunas said in a Thursday research note that an amended filing by Ark Invest and 21Shares — amounting to at least five pages of text — was likely made at the SEC’s request.
“This back-and-forth between the SEC and fund sponsors is standard practice for new launches but a first for spot bitcoin ETF applications, indicating that the SEC is working to approve Ark’s proposal,” Seyffart & Balchunas penned.
Ark Invest’s spokesperson and 21Shares’s spokespeople both declined to respond.
Clarity was added about where assets of the trust are stored. “in segregated accounts on the bitcoin blockchain, commonly referred to as wallets.” This filing states that these assets are included in the asset list. “therefore not commingled with corporate or other customer assets.”
In the new filing, it is also noted that mining operations consume “significant amounts of energy,” The value of bitcoin in the ETF is determined by generally accepted accounting practices, also known as GAAP.
“If these are actually responsive to SEC comments, it doesn’t look like the agency is putting up any unnecessary roadblocks via disclosure review,” Scott Johnsson said that the Ark 21Shares ETF has been updated in a post on X. “At least currently and based on this amendment.”
Jake Chervinsky has responded to Johnsson’s point of view. Chervinsky will soon be moving from the Blockchain Association as Chief Policy Officer to Variant Fund to become chief Legal Counsel. “It ain’t over ’til it’s over, but all signs point toward SEC approval for bitcoin spot ETFs.”
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