The U.S. Court of Appeals has issued its highly anticipated order for the Securities and Exchange (SEC) to review Grayscale’s spot Bitcoin ETF application.

“In accordance with the judgment of August 29, 2023… this constitutes the formal mandate of this court,“ wrote Court of Appeals Clerk Mark Langer in a Monday filing.

The judgment relates to Grayscale’s lawsuit against the SEC from last year, in which the firm sued the agency for refusing to allow its Grayscale Bitcoin Trust (GBTC) to convert into a spot Bitcoin ETF.

The firm argued that the SEC’s judgment was “arbitrary and capricious” given the firm’s acceptance of similarly structured Bitcoin futures ETF products— an assessment with which the court’s judges unanimously agreed in August.


After the ruling, the SEC had 45 days to appeal the case but remained radio silent as its deadline passed earlier this month. This made a court order to reassess Grayscale’s application inevitable, which has now arrived.

While the SEC still has the power to deny the application, it would need to find a new reason for doing so not related to its prior justification: that the futures Bitcoin market is not closely connected enough to the spot market. Other Bitcoin ETF applicants, such as Bitwise, have already laid out a slew of counter-arguments should the agency pursue a similar pathway again.

Though the agency representatives refuse to directly comment on the case, SEC commissioner Hester Peirce said on Monday that she is “mystified” why her agency hasn’t approved a spot Bitcoin ETF by now.

The Grayscale Bitcoin Trust (GBTC) is the world’s largest Bitcoin fund, but its shares will not be directly redeemable for BTC until a conversion is approved. Amid growing confidence that the company will succeed, GBTC shares have soared 33% over the past month.


Edited by Ryan Ozawa.

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