Summary: In a groundbreaking move, the DC Circuit Court of Appeals has granted Grayscale Investments permission to review their case against the SEC. The lawsuit centers around the SEC’s refusal to allow Grayscale to convert its Bitcoin Trust (GBTC) into a Bitcoin ETF. This is not just a win for Grayscale but a significant moment for the cryptocurrency world at large.

The drama between Grayscale Investments and the Securities and Exchange Commission (SEC) reached a tipping point on August 29, 2023. The DC Circuit Court of Appeals gave Grayscale the green light to challenge the SEC’s previous decision on converting its Bitcoin Trust (GBTC) into an ETF (Exchange-Traded Fund).

A Brief History of the Lawsuit

Grayscale had filed a lawsuit against the SEC in June 2022. The bone of contention? The SEC had given approval to ETFs that invest in Bitcoin futures but denied Grayscale’s request to hold Bitcoin directly. Grayscale argued that this decision was “arbitrary and capricious,” a stance that has now been supported by the court.

A Monumental Step Forward

The court’s decision has been hailed as a monumental step for not just Grayscale but also for the wider Bitcoin and cryptocurrency ecosystem. As per Blockworks, Grayscale’s legal team is “actively reviewing” the court’s decision. The company spokesperson expressed optimism, stating, “This is a monumental step forward for American investors, the bitcoin ecosystem, and all those who have been advocating for bitcoin exposure through the added protections of the ETF wrapper.”

Spot Market vs. Futures Market

During the hearings, Grayscale’s legal strategist emphasized a crucial point: there’s a 99.9% correlation between prices in the Bitcoin futures market and the Bitcoin spot market. The SEC failed to dispute this evidence, thereby falling short of the standard for reasoned decision-making, according to the court filing. This aligns well with the industry’s view, as noted by Bloomberg Intelligence Analyst James Seyffart, who believed Grayscale had a 70% chance to win.

Next Steps: Still a Gray Area

Although the court has granted the petition for review, next steps remain uncertain. If the court deems the SEC’s denial insufficient, the regulator could potentially come back with different reasoning for their decision.

Impact on Bitcoin Price

News of the court’s decision was enough to give Bitcoin a significant price bump. The cryptocurrency soared above $27,000 after beginning the day around $26,100.


This ruling is a significant development in the world of cryptocurrency and a potential game-changer in the ongoing struggle for regulatory approval of crypto-based financial products. For now, all eyes are on Grayscale and the SEC as they navigate the next steps in this landmark case.

By dadaas