According to German investment bank Berenberg, the U.S. Securities and Exchange Commission (SEC) may prepare alternative arguments to justify continued rejections of spot bitcoin (BTC) exchange-traded-fund (ETF) applications due to concerns about the spot bitcoin market. Despite this, the bank believes that Grayscale’s legal victory has increased the likelihood that the ‘SEC will finally approve one or more spot bitcoin ETF applications.’
On Tuesday, a federal court ruled that the SEC must review its rejection of Grayscale’s attempt to convert the Grayscale Bitcoin Trust (GBTC) into an ETF. The approval of a spot bitcoin ETF could be a game changer for the crypto industry as it would allow a wider range of institutional investors to access the market. The panel did not compel the SEC to approve a spot bitcoin ETF, but said the regulator needed to revisit the arguments it used to support its rejection of Grayscale’s application. The SEC also has the option to appeal the panel’s ruling.
Following the Grayscale legal win, crypto-exposed stocks surged, with Coinbase (COIN) gaining 14.9% and MicroStrategy (MSTR) rallying 10.8%. Berenberg notes that approval of a spot ETF would be good for bitcoin, and anything that would be good for bitcoin would be good for MSTR. However, Coinbase’s potential involvement in those ETFs could serve as part of the SEC’s reconfigured arguments for rejecting the applications.