According to CryptoPotato, a U.S. circuit court in Washington D.C. has ordered the Securities and Exchange Commission (SEC) to revisit its rejection of a Bitcoin ETF application by crypto hedge fund Grayscale. However, this does not guarantee approval, as the SEC may find new reasons to reject it or any of the dozen other applications.
Crypto industry investors and insiders expect the price of Bitcoin and other crypto assets to surge if and when the SEC approves an exchange-traded fund for BTC. On the other hand, news of any Bitcoin ETF rejections by the SEC could lead to a drop in Bitcoin price. ETF Store president and ETF Institute co-founder Nate Geraci warned that if the SEC does not approve a Bitcoin ETF in January, markets could see one of the 'bigger rug pulls in crypto history.'
The SEC has shown no signs of making it easy for institutional financiers who want to launch a Bitcoin ETF. It has so far rejected 'in-kind' structured ETFs and insisted on 'cash create' ETFs by issuers. This form will raise tax liabilities for issuers and perhaps fees for clients. The battle between funds and regulators could delay an ETF past January. A Bitcoin ETF could also threaten crypto exchanges, as it is expected to significantly reduce trading fees for the original cryptocurrency, potentially benefiting investors.
