- SEC Commissioner Hester Peirce credits Grayscale’s legal win for the recent approval of Bitcoin ETFs in the U.S.
- The court ruling against the SEC’s initial denial played a crucial role in accelerating the ETF approval process.
A Decade-Long Wait Ends with Regulatory Approval
The long-anticipated approval of spot Bitcoin Exchange-Traded Funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) marks a significant milestone in the cryptocurrency sector. This approval, which seemed elusive for over a decade, was significantly influenced by Grayscale Investments’ legal challenge in 2023, as pointed out by SEC Commissioner Hester “Crypto Mom” Peirce.
Grayscale’s Court Victory: A Catalyst for Change
The U.S. District Court of Appeals’ decision in October 2023 to overturn the SEC’s denial of Grayscale’s application was a turning point. This ruling mandated a second review of Grayscale’s bid to transform its Bitcoin trust into a spot Bitcoin ETF. Peirce emphasized that this legal intervention, dubbed “the DC Circuit-ex-machina,” was pivotal in breaking the deadlock and compelling the SEC to reconsider its stance on Bitcoin ETFs.
A Shift in Regulatory Perspective
Despite the approval of 11 spot Bitcoin ETF applications, Peirce critiqued the SEC for its prolonged hesitance and inconsistent treatment of spot Bitcoin products. She argued that the Commission should have recognized its error in delaying these approvals and applied the same standards used for other commodity-based exchange-traded products (ETPs) much earlier.
Commissioner Votes and Rationale
Peirce, alongside Commissioners Gary Gensler and Mark Uyeda, voted in favor of the Bitcoin ETFs, while Commissioners Caroline Crenshaw and Jaime Lizarraga opposed. Peirce’s dissatisfaction with the SEC’s rationale for its change of heart reflects a broader criticism of the regulatory body’s approach to cryptocurrency-related products.
A New Chapter for Bitcoin ETFs
Following the SEC’s green light, major players like ARK 21Shares, Invesco Galaxy, and others received approval for their 19b-4 applications, paving the way for listing and trading of spot Bitcoin ETFs on various exchanges. Bloomberg ETF analyst James Seyffart anticipates that these ETFs will likely be ready for trading as early as Jan. 11, signifying a new era in cryptocurrency investment options.
This landmark decision by the SEC, influenced significantly by Grayscale’s legal victory, opens the doors to mainstream investment in Bitcoin, reflecting a major evolution in the integration of cryptocurrencies within the traditional financial system.