On August 29, the US Court of Appeals ruled in favor of Grayscale in its legal battle against the US Securities and Exchange Commission (SEC). Following this, Grayscale’s GBTC shares trading volume significantly increased, climbing to a 2-year high in the method.
GBTC Shares See 17% Increase
In line with data from Yahoo Finance, GBTC’s share price had opened at $17.66 on the day and closed at $20.56, rising by almost 17% from the day past. Moreover, the fund saw its busiest day in over a 12 months, with over 19 million GBTC shares changing hands. This volume jump marked the fund’s highest in over two years.
These figures aren’t surprising, considering that Grayscale’s victory presents a bullish outlook for the fund. Moreover, Grayscale’s GBTC is one step closer to being converted right into a Spot Bitcoin ETF, so many investors should want to get in on the fund at a reduced price.
GBTC currently operates as a closed-end fund and has seen a reduction as high as 48.89% of its net asset value (NAV) in December 2022. This discount has been reduced to about 18% following the court’s ruling in favor of Grayscale. Nonetheless, some still consider this gap could close further, especially if Grayscale’s ETF application were approved.
Share price rises 17% in in the future | Source: Grayscale Bitcoin Trust on Tradingview.com
Big Win For The Crypto Community
Grayscale had filed a lawsuit following the SEC’s refusal to grant its application to convert its GBTC fund right into a Spot Bitcoin ETF.
Grayscale argued that the SEC acted arbitrarily and capriciously by not giving it the identical regulatory treatment the Commission did to the Teucrium Bitcoin Futures Fund and the Valkyrie XBTO Bitcoin Futures Fund.
The fund stated that it deserved the identical treatment because the Bitcoin futures fund since the prices of each Spot and Futures Bitcoin ETFs were “99.9%” correlated, in order that they posed the identical risk regarding fraud and manipulation.
The court adopted Grayscale’s argument and agreed that the SEC had not provided sufficient reason for denying Grayscale’s application while approving the Bitcoin futures funds.
With this ruling, the SEC’s primary reason for not approving a Spot Bitcoin now not carries weight, because the Commission can now not deny applications solely since the Spot Bitcoin market has no regulated market of serious size.
The court already found each funds (spot and futures) to be similar, so these exchanges’ surveillance sharing agreements with the Chicago Mercantile Exchange (CME) ought to be sufficient to discourage manipulation in either the spot or futures market.
While it stays to be seen what step the SEC will take regarding the Court of Appeal’s ruling, there’s an increased likelihood that the Commission could have to approve the pending Spot Bitcoin ETF applications except if it could find another excuse to disclaim these proposals.
Featured image from Bitcoinist, chart from Tradingview.com