First Bitcoin ETF Could Be Coming Soon as Court Rules in Favor of Grayscale Over SEC

The U.S. Court of Appeals for the D.C. Circuit has paved the way for bitcoin exchange-traded funds. From a report: On Tuesday, the court sided with Grayscale in a lawsuit against the Securities and Exchange Commission which had denied the company's application to convert the Grayscale Bitcoin Trust to an ETF. The decision could impact other companies that want to create bitcoin ETFs, like BlackRock and Fidelity. A spot bitcoin ETF would be traded through a traditional stock exchange, although the bitcoin would be held by a brokerage, and would allow investors to gain exposure to the world's biggest cryptocurrency without having to own the coin themselves. Many crypto bulls believe that approval of a spot bitcoin ETF will lead to more mainstream institutional adoption.

Bitcoin, ether and other major cap crypto coins surged on the news, and Coinbase, which is listed as the custodian partner in multiple spot bitcoin ETF applications, was up more than 14% on Tuesday. "The Commission failed to adequately explain why it approved the listing of two bitcoin futures ETPs but not Grayscale's proposed bitcoin ETP," the court said, referring to exchange-traded products. "In the absence of a coherent explanation, this unlike regulatory treatment of like products is unlawful." Grayscale Investments, which manages the world's biggest crypto fund, initiated its lawsuit against the SEC in June 2022 after the agency rejected its application to turn its flagship bitcoin fund, better known by its ticker GBTC, into an ETF. The company decided to pursue the ETF, which would be backed by bitcoin rather than bitcoin derivatives, after the SEC approved ProShares' futures-based bitcoin ETF in October 2021.

Terminology explained

[Anonymous Coward]

Many crypto bulls believe that approval of a spot bitcoin ETF will lead to more mainstream institutional adoption.

Crypto bull. Noun. Producer of crypto bullshit.

The whole summary is acronyms

[Anonymous Coward]

Is there an English version somewhere? Or don't we do that anymore?

Re:

[Anonymous Coward]

US="United States"
DC="District of Columbia"
ETF="Exchange Traded Fuckup"
ETP="Exchange Traded Pisstake"

Re:The whole summary is acronyms

[CrappySnackPlane]

Instead of buying a baseball card yourself and having to protect it from thieves, you can pay some guy in a suit with an MBA to buy a baseball card and protect it from thieves himself. And then when the thieves steal it from him anyway you can maybe get 25% of what you paid him if you get really lucky in court.

Re:

[youngone]

Thanks. I knew there was a simple explanation.

Re:

[rsilvergun]

At least with a baseball card there's something real there before it gets stolen. This is like paying somebody to protect and imaginary baseball card that everyone is agreeing is real for as long as it's convenient.

Re:

[Shaitan]

"This is like paying somebody to protect and imaginary baseball card that everyone is agreeing is real for as long as it's convenient."

Like when you pay a bank to protect money or a bond or a debt, an imaginary thing people only agree is real for as long as it's convenient.

Re:

[Shaitan]

That isn't far off. But what it really does is enable most people to access their investment funds which are tied up in tax deferred accounts to buy and hold bitcoin and for everyone else it lets them get around the cumbersome tax paperwork, the ETF and your brokerage respectively deal with the tax paperwork.

Usually the overhead fee of administering the ETF is small so most of the money goes into the underlying investment but some aren't and I haven't looked at this one.

Re:

[CrappySnackPlane]

For everyone else it lets them get around the cumbersome tax paperwork, the ETF and your brokerage respectively deal with the tax paperwork.

Yeah, not untrue as written. But pragmatically, you're basically converting a bunch of cumbersome tax paperwork to a bunch of cumbersome brokerage paperwork.

"Resident In the US"

[brunes69]

Other markets like UK, EU, and Canada have had Bitcoin ETFs for many years. US investors are able to buy them via any number of brokerages with access to those markets. Anyone who is seriously interested in a BTC ETF has owned one for a long time.

Re:

[Anonymous Coward]

Anyone who is seriously interested in a BTC ETF has owned one for a long time.

Don't be ridiculous. I'm interested in all sorts of scams but I don't give them my money.

Re:

[Bahbus]

Anyone who is seriously interested in a BTC ETF has owned one for a long time.

Morons. Morons have owned them for a long time. Because only morons do anything with crypto.

Re:

[rossdee]

" One token can be traded for a cow, bushel of wheat ..."

That seems to imply that a cow has the same value as a bushel of wheat.

I wasn't born here, so I have no idea how big a bushel is, but I know you can hide your light under one, but I still think a cow would be worth way more...

Re:

[nicolaiplum]

You can hide your light under a cow too, so I think the cow and the bushel are probably about the same.

Map to denial != paved way

[dpille]

So, the court says the SEC has to articulate a reason an ETF is different than a futures market in order to deny an application. Here's one: every single coin of every single type could be stolen later today and the futures market would be fine.

How's your ETF gonna work if all the coins are removed from the sponsor's wallet?

You had me at

[angularbanjo]

âoeBitcoin futureâ

oh shit....

[mr.dreadful]

After watching "The Big Short", I have no faith that these people have any idea what they are doing.

Re:

[martinX]

This sounds like something Selena Gomez could explain.
https://www.youtube.com/watch?... [youtube.com]

Re:

[nicolaiplum]

After watching "The Big Short" I have every faith that these people know exactly what they are doing - defrauding others.

Now you can

[Growlley]

can gamble on the gamble with out having to be exposed to the gamble of owning the gamble.

Crypto = drug cartel and rogue state bonds.

[Eunomion]

Every bit as stable, reliable, and secure as you would expect.

Cat shit wrapped in dog shit

[bubblyceiling]

Coming soon to a stock exchange near you ⦠even more crypto scams.

Well fuck, here comes a depression

[rsilvergun]

this crap is going to get bundled into securities like the ones that caused the 2008 crash only this time instead of houses it'll be pretend money. There's no bottom to that crash. Here's hoping I'm dead before it happens, because I can't see Americans coming to their senses enough to make it illegal to "invest" in pretend money....

Next up, ETTs

[indytx]

Exchange Traded Tulip bulbs.