What happens if SEC doesn’t appeal Grayscale spot Bitcoin ETF ruling?
The SEC is faced with the decision to appeal Grayscale's victory in a D.C. Appeals Court on October 13 or move forward with approving or potentially delaying the firm's Bitcoin ETF bid.
David Becker 
The United States Securities and Exchange Commission (SEC) faces a looming deadline to decide whether to appeal a court ruling in favor of Grayscale Investments, which requires the regulator to review the fund manager's application for a spot Bitcoin fund. Many observers don't expect the SEC to appeal the court's decision, but analysts suggest there could be ways for the SEC to delay the approval of Grayscale's spot Bitcoin ETF conversion. The SEC has until October 13 to either appeal the court's decision to the U.S. Supreme Court, request the Appeals Court to reconsider its ruling, or proceed with the court's August order to review Grayscale's proposal to convert the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
Bloomberg ETF analyst Eric Balchunas believes that an appeal is unlikely, but he acknowledges the possibility of other obstacles. Fellow Bloomberg ETF analyst James Seyffart concurs, noting that while an SEC attempt to deny approval on new grounds is unlikely, they could employ tactics to continue delaying.
A note from the law firm Ropes & Gray outlines possible scenarios for further delays, including sending the GBTC application back for review, which would give the SEC another opportunity to reject it on different grounds. Additionally, a delay could occur if the New York Stock Exchange has to submit a new filing to list GBTC, potentially resulting in an eight-month wait for the SEC's decision.
Currently, there are at least seven spot Bitcoin ETF applications awaiting SEC approval. Most of them have faced delays and opposition from the SEC, with final approval deadlines set for around March 2024 or later. The approval of Grayscale's spot Bitcoin ETF application is closely watched because it could set a precedent for other applications. Bloomberg analysts estimate a 75% chance of an approved spot Bitcoin ETF this year, with the likelihood increasing to 95% by the end of 2024.
