Grayscale’s Bitcoin ETF Decision Postponed Again by US Appeals Court – Here’s Why

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The US Court of Appeals has again postponed its decision on whether Grayscale can convert its popular Bitcoin Trust into a spot Bitcoin exchange-traded fund (ETF). The announcement was made by Craig Salm, Grayscale’s chief legal officer.

The latest delay comes after the ruling was previously pushed back on two occasions earlier this year. The decision was widely expected by industry observers on Tuesday, August 22, based on typical timelines for such cases. However, no announcement came from the DC Circuit Court, leaving stakeholders waiting for clarity.

The decision gets delayed for the third time

Grayscale filed suit against the Securities and Exchange Commission (SEC) after the regulator rejected the asset manager’s application to change the $20 billion Grayscale Bitcoin Trust (GBTC) into an ETF in 2017. The trust would allow retail investors easier access to bitcoin exposure through regular brokerage accounts.

During a March 2023 hearing, Grayscale argued the SEC unfairly denied its application despite approving futures-based bitcoin ETFs in 2021. The company asserts the Commission is contradicting its own rationale on investment vehicles for the largest cryptocurrency by market capitalization.

The SEC maintains it cannot sufficiently protect investors from fraud and manipulation with a spot bitcoin ETF. The Commission denied over a dozen similar applications before approving the futures products.

With the regulatory status of bitcoin ETFs still unresolved, cryptocurrency markets face ongoing uncertainty. The mounting delays in a decision have left investors and industry professionals eager for clarity. The eventual ruling will provide pivotal insights into the SEC’s views on expanding access to Bitcoin investments.