Bitcoin’s price experienced a surge to its highest point in two weeks on August 29, following news that Grayscale, a digital asset manager, had emerged victorious in a legal battle against U.S. regulatory authorities.
Market Reaction and Price Movement
BTC/USD witnessed an instant price reaction, gaining $1,700 within approximately 30 minutes after the news broke. The positive development ended a period of stagnation in Bitcoin trading, which had been lingering since mid-August due to sudden losses.
The U.S. Court of Appeals for the District of Columbia Circuit deemed the U.S. Securities and Exchange Commission’s (SEC) rejection of Grayscale’s application to launch a Bitcoin-based exchange-traded fund (ETF) as “arbitrary and capricious.” The court’s ruling highlighted the SEC’s inconsistency in treating similar products differently. The court subsequently granted Grayscale’s petition and vacated the order of denial.
Potential Implications and BlackRock’s ETF Application
Grayscale now joins other entities awaiting approval to launch the first U.S. Bitcoin spot ETF, while the SEC is yet to greenlight any such application. Analysts speculate that this legal victory could bode well for existing ETF applications, including that of global asset manager BlackRock. This development is seen as a possible catalyst for the beginning of a bullish cycle in the Bitcoin market.
Grayscale’s Journey and CEO’s Response
Grayscale’s battle with the SEC has been marked by persistence, with CEO Michael Sonnenshein vowing not to relent until permission was granted to convert Grayscale Bitcoin Trust (GBTC) into an ETF. Following the news of the SEC’s setback, Sonnenshein expressed gratitude to investors and announced that the legal team was actively reviewing the court’s opinion.
The share price of Grayscale Bitcoin Trust (GBTC) surged over 17% on the day, reaching $20.60 at the time of writing.