The U.S. Securities and Exchange Commission (SEC) is likely to prepare alternative arguments to justify continuing to reject spot Bitcoin (BTC) exchange-traded fund (ETF) applications over concerns about the spot Bitcoin market, German investment bank Berenberg said in a research report published Wednesday. He said it was possible.
SEC May Prepare Alternative Arguments to Reject Spot Bitcoin ETFs
The report noted that Coinbase's potential participation in spot bitcoin ETFs could be part of the SEC's restructured arguments to reject the applications.
Still, analysts led by Mark Palmer wrote that Grayscale's victory may have increased the likelihood that “the SEC will finally approve one or more spot Bitcoin ETF applications.”
A federal court ruled on Tuesday that the SEC should review Grayscale's rejection of its attempt to convert the Grayscale Bitcoin Trust (GBTC) into an ETF.
Approval of a spot Bitcoin ETF could be a game changer for the crypto industry as it would allow a wider range of institutional investors to access the market.
ETFs are popular because they allow market participants to invest in cryptocurrencies without having to purchase the underlying digital assets themselves.
Analysts said the decision did not force the SEC to approve a spot Bitcoin ETF, but that the regulator should reconsider the arguments it used to support Grayscale's rejection of its application.
The SEC also has the option to appeal the decision, the report stated.
Berenberg noted that after Grayscale's legal victory, crypto-related stocks soared, with Coinbase (COIN) gaining 14.9% and MicroStrategy (MSTR) gaining 10.8%.
*This is not investment advice.
