Grayscale vs SEC lawsuit may help BlackRock’s Bitcoin spot ETF application

On Jun 28, 2023

Bloomberg’s senior legal analyst said that there is a 70% chance for Grayscale to win against the American securities regulatory body.

Grayscale Investment is a US-based digital assets management firm, a subsidiary of the Digital Currency Group (DCG). In the present time, Grayscale stands as a leader in the semi-digital financial world, which provides Bitcoin investment via its Bitcoin Trust. DCG’s subsidiary also provides investment in flagship crypto assets via trusts.

Since Q4 2021, Grayscale tried to convert its Bitcoin Trust (GBTC) into a Bitcoin spot ETF but faced rejection from the United States Securities Exchange Commission (SEC).

Grayscale challenges the SEC’s rejection decision & fights against the SEC body in the court to get approval for its Bitcoin spot ETF.

On 27 June 2023, Bloomberg Intelligence senior legal analyst Elliot Z. Stein shared his opinion on the Grayscale vs SEC suit & said that there is a 70% chance for Grayscale to win in the case.

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The senior analyst also noted that if Grayscale will win the case then in that situation it will bring another positive outcome for BlackRock’s Bitcoin spot ETF application, which has been waiting to get regulatory approval from the SEC since couple of weeks.

Another reason we give spot bitcoin ETF approval 50% chance is our senior legal analyst @NYCStein gives Grayscale a 70% chance of winning case against SEC, who could approve BlackRock's ETF as way to save face using trusted 'adult' TradFi cos & stick it to Grayscale via @JSeyff pic.twitter.com/pHydOcpuQo
— Eric Balchunas (@EricBalchunas) June 27, 2023

In the past, the SEC agency rejected every Bitcoin spot ETF application but approved several Bitcoin futures ETF products. According to the SEC’s experts, Bitcoin spot ETFs are more risky over futures ETFs because it is easy to manipulate the price of Bitcoin spot ETFs.

Through the suit, Grayscale alleged that Bitcoin futures ETFs are more risky than Bitcoin spot ETFs but still the SEC agency considers Bitcoin futures ETFs more safe than spot ETFs.

Earlier this few experts noted that if Grayscale won the case then there is a huge chance that SEC will issue an order for all the approved Bitcoin futures ETFs to shut down their product and opposite to it there will be some chance to give regulatory approval for Bitcoin spot ETFs also.