A US court has ruled in favour of Grayscale Investments in its lawsuit challenging the decision by the Securities and Exchange Commission (SEC) to deny the conversion of the $16.9 billion Grayscale Bitcoin Trust into an ETF.

The Court’s ruling represents a significant step towards spot bitcoin ETF approval.
According to the DC Circuit Court of Appeals, Grayscale presented sufficient evidence that the Grayscale Bitcoin Trust is similar, across relevant regulatory factors, to bitcoin futures ETFs. The Court, therefore, questioned the SEC’s decision to refuse Grayscale’s conversion considering it had previously approved the listing of bitcoin futures ETFs.
The ruling reads: “In the absence of a coherent explanation, this unlike regulatory treatment of like products is unlawful. We therefore grant Grayscale’s petition for review and vacate the Commission’s order.”
Commenting on the ruling, Michael Sonnenshein, CEO of Grayscale Investments, said: “This is a historic milestone for American investors, the Bitcoin ecosystem, and all those who have been advocating for Bitcoin exposure through the added protections of the ETF wrapper.
“Grayscale has adhered to US financial rules and regulations in building our product suite since our founding in 2013, underpinned by one fundamental belief: investors deserve transparent, regulated access to crypto. It’s incredibly exciting that we are one step closer to making a US spot bitcoin ETF a reality.”
The ruling does not assure that the Grayscale Bitcoin Trust will imminently be converted into an ETF as the SEC has 45 days to appeal the Court’s decision. The price of bitcoin surged by more than 5% following the ruling, however, indicating that the market views the decision as a significant step toward the eventual approval of a spot bitcoin ETF.
In addition to Grayscale, BlackRock, Fidelity, ARK Invest, Bitwise Asset Management, WisdomTree, VanEck, Invesco, and Valkyrie all also currently have active filings with the SEC for the listing of spot bitcoin ETFs.
Many analysts believe that the SEC will approve all pending applications simultaneously in order to maintain an even playing field amongst prospective issuers.