Last Tuesday, the U.S. Securities and Exchange Commission (SEC) received a resounding rebuke. A federal appeals court, led by Circuit Judge Neomi Rao, mandated the SEC review its decision to deny Grayscale Investments the right to convert its Grayscale Bitcoin Trust (GBTC) into an Exchange-Traded Fund (ETF). This directive is seen as a big win for not only Grayscale but also the general public, many of whom are eager to invest in Bitcoin.
The decision not only points flowers to the ever-present chasm – the SEC’s persisting resistance to Bitcoin ETFs, despite the increased swell of applicants looking for approval. To many crypto enthusiasts, the SEC’s denial to treat GBTC as an ETF seems inconsistent, and according to Rao, it is “arbitrary and capricious.”
This victory’s significance move beyond mere regulatory debate. It raises the question of the public’s right to invest in cryptocurrency through an ETF. This platform offers a simpler alternative to direct purchase or facing the risks involved with custody providers. The SEC’s staunch resistance begs the question, are they distancing the public from their investment freedom?
Following the court’s ruling, Bitcoin recorded around an 8% spike, crossing the $28,000 mark. The repercussion trailed into the GBTC, which had the busiest trading moment in 14 months, and its share price increased by 18%. Notably, bitcoin cash (BCH) and Stacks (STX), a bitcoin layer 2 protocol, reaped a 15% and 20% gain respectively.
Nonetheless, the high soon tapered out. Bitcoin dropped under $27,400, and though it was still a 5% improvement over the past 24 hours; it’s a concerning demonstration of the crypto volatility.
Another critical player in the situation is Genesis Global Capital (GGC), a now-defunct lender, processing bankruptcy after taking hits from the collapse of the hedge fund Three Arrows Capital and crypto exchange FTX. GGC and the parent company Digital Currency Group (DCG) recently declared a tentative agreement involving partial repayments to cover $630 million in unsecured loans and another $1.1 billion due in 2032. This solution, however, is seen as “wholly insufficient” by a group of creditors, underlining the extensive financial battles the crypto world is facing.
While the news from the appeals court seems encouraging, this has only highlighted the robustness of the controversies in the blockchain markets — the right to access versus the need for safety, the volatility, and the undeniable financial risks. The cryptocurrency world continues to evolve rapidly, now more than ever, seeking a balance between these extremes. So, we watch, as curious spectators, waiting to see how it unfolds under the regulatory microscope.
Source: Coindesk
