Bitcoin price hit $28.000 after the US Court of Appeals granted Grayscale review of its proposal to convert the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF, overturning the SEC's rejection.
The order issued by U.S. Court of Appeals Judge Neomi Rao grants Grayscale’s petition for review of the application that had been rejected by the SEC and vacates the regulator’s order denying its application to convert Grayscale Bitcoin Trust into a Bitcoin spot ETF.
While this does not mean that GBTC's conversion into a Bitcoin spot investment fund has been approved, it does force the SEC to review the company's offering again.
Analysts and the crypto community have therefore hailed Judge Rao's ruling as a victory over the securities regulator.
MicroStrategy President Michael Saylor highlighted that the recent decision by the Court of Appeals is paving the way for the arrival of Bitcoin spot ETFs.
Grayscale wins lawsuit against the SEC
In the middle of last year, Grayscale imposed a demand against the SEC after the securities regulator rejected its petition to convert the GBTC investment fund into a Bitcoin spot ETF.
The crypto asset management company alleged that the SEC was acting arbitrarily by rejecting the application, while it had approved a Bitcoin futures ETF.
It is worth recalling that, as reported by this media, during the consultation period opened by the SEC to receive comments on Grayscale's proposed change, 95% of the comments and opinions received from interested parties were positive and in favor of the conversion of the investment vehicle. Even so, the SEC rejected Grayscale's proposal citing its concern for the stability of investors. Therefore, the company decided to file a petition for review before the Court of Appeals.
This petition for review is the one that has been granted by the court recently.
Judge Rao ruled that the SEC must treat all similar case applications equally, citing arguments by Grayscale, which contends that its proposed Bitcoin exchange-traded product is materially similar to the Bitcoin futures traded products that the SEC has approved in the country, and which therefore should also have been approved by the SEC for trading on the NYSE Arca exchange.
In Judge Rao's view, the SEC did act arbitrarily and capriciously by rejecting Grayscale's proposal without explaining why it was treating similar products differently.
“We agree”, the judge wrote. “We therefore grant Grayscale’s request and vacate the order.”.
In light of the news, the price of Bitcoin (BTC) has surged above $28.000, earning more than $2.000 per unit in the last few hours.
Bitcoin returns to $28.000
According to data from CoinMarketCap, the price of Bitcoin reached $28.006 after Grayscale's victory, recording a daily gain of 7,36% so far.
Bitcoin’s market cap is also up, surpassing $543.400 billion at the time of writing, while BTC trading volume has soared by more than 164% compared to yesterday’s trading volume.
Source: CoinMarketCap
Besides Bitcoin, other cryptocurrencies also turned green after the Grayscale news. However, at press time, the price of Bitcoin is hovering around $27.900 per BTC.
Continue reading: Approval of a Bitcoin spot ETF will inject new capital into the crypto market, according to Bernstein
