What happens if the SEC doesn’t question the decision of the Grayscale spot Bitcoin ETF?

The United States Securities and Exchange Commission has reached a deadline to appeal a court decision in favor of grayscale investments, which forces the regulator to review the fund manager for the spot Bitcoin (BTC) fund.

While many observers don't believe the securities regulator will try to appeal the court's decision, analysts say there may still be ways for the SEC to delay Greyscale's spot Bitcoin ETF conversion.

On October 13, the SEC must appeal the DC Circuit Court of Appeals decision to the US Supreme Court, ask the appeals court to review the decision or follow the court's August order and review Greyscale's bid to convert the Grayscale Bitcoin Trust (GBTC). To one place Bitcoin ETF.

While an appeal is unlikely, Bloomberg ETF analyst Eric Balkunas said in an Oct. 12 response to an X user query that other hurdles are still possible.

“We think [an] The appeal is long […] But there is always the possibility of something else happening.

Meanwhile, in another post, fellow Bloomberg ETF analyst James Seifert said the SEC's attempt to deny it on new grounds is unlikely and “a very difficult needle to thread,” but “could find ways to delay.”

Not officially. The SEC may try to deny it on new grounds but it has the likes of @Eric Balchunas, myself, @NYCStein, @SGJohnsson, @NateGeraci and many others. Threading is very difficult and we consider it unlikely. They can find ways to keep delaying though IMO.

— James Seyff (@JSeyff) October 12, 2023

A September memo from law firm Ropes & Gray warned that GBTC's application could be sent back to the SEC, giving the regulator another chance to reject it on a different basis.

“In this case, the new denial itself may be appealed by the GBTC to the DC Circuit,” he wrote.

Another potential delay, according to Ropes and Gray, is if the New York Stock Exchange has to file a new listing to list GBTC — then the SEC could take up to eight months to reach a decision on the ETF.

RELATED: House committee chair threatens SEC chairman with subpoena, but not on crypto

Currently, at least seven spot Bitcoin ETF applications have been filed before the regulator.

While all previously filed with the regulator in 2023, all have faced delays and pushbacks from the SEC that have pushed their final approval deadlines to March 2024 or later for most.

However, most eyes are on Greyscale's spot Bitcoin ETF conversion application because if the SEC approves it – the regulator may struggle to find reasons to knock back other applications.

According to Bloomberg analysts, who updated the odds after the Greyscale court win, there is a 75% chance of an approved spot Bitcoin ETF this year. The chances jump to a 95% chance of approval by the end of 2024.

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