SEC’s Grayscale Bitcoin ETF Appeal Window Closes Friday: What Analysts Expect

The clock is ticking down to this Friday (October 13), when the window for the US Securities and Exchange Commission (SEC) to appeal the Grayscale Bitcoin spot ETF ruling by the US District of Columbia Circuit will shut. As this deadline looms, the crypto community is abuzz with speculation, predictions, and hopes for what the outcome might entail for the larger digital currency ecosystem.

What Will Happen On Friday?

Prominent ETF analyst from Bloomberg, Eric Balchunas, recently shed light on the current situation in a conversation on X (formerly Twitter).

He emphasized the SEC’s deviation from its traditional methods, stating:

The fact that they are actively engaging with issuers on their current filings (via comments, which hasn’t ever happened before) we think appeal [is] unlikely and denial unlikely. Again we holding line at 75% odds approval by [the] end of year, a number that would only go up if we go into January.

Supporting Balchunas’ optimism, his colleague James Seyffart also chimed in with, “I don’t think they will appeal. But it’s possible and even if they do — the SEC will lose. More likely we just get a better understanding of next steps.”

The broader crypto community on X has been fervently debating the potential outcomes. Rat Fat, an active user, emphasized the inherent uncertainties, noting that the lack of an appeal might not translate directly into an approval for Grayscale’s ETF conversion.

Wilson, another user, speculated on the post-deadline procedures. He theorized that, in the absence of an appeal, the Court might swiftly lay down a clear timeline, perhaps a 45-day window, for the SEC to conclusively decide on Grayscale’s proposal.

Bloomberg analyst Seyffart agreed with Wilson, arguing that the US authority cannot drag out the decision on a Bitcoin spot ETF ad infinitum: “Agreed. At some point the courts or SEC or someone will say ‘The SEC is going to issue an order by XX/XX deadline’ (45 days, 60 days, 90 days etc etc).”

Broader Implications For A Bitcoin Spot ETF

Digging deeper into the roots of this saga, the DC Circuit Court of Appeals passed a unanimous ruling on August 29, 2023, that leaned in Grayscale’s favor. This was a monumental decision that found the SEC’s earlier denial to be “arbitrary and capricious”, particularly when compared to their stance on futures-based BTC products.

Reacting swiftly to this verdict, Grayscale reached out to the SEC, sending a letter to the SEC to emphasize their position and initiate timely communication to get the launch of a Bitcoin spot ETF started as soon as possible. But since then, there has been silence. Neither Grayscale nor the SEC have commented again on the status of the proceedings.

Notably, the industry’s anticipation of this decision isn’t merely about Grayscale. The outcome has broader implications. An approval or a non-appeal from the SEC could potentially open the floodgates for numerous other Bitcoin spot ETF applications such as those from BlackRock, Fidelity, Bitwise, Ark Invest, and Invesco that are waiting in the wings.

At press time, Bitcoin traded at $27,696.