As the Bitcoin and crypto industries are at what could be a pivotal moment, the D.C. Circuit Court of Appeals is expected to rule this week on a lawsuit filed by Grayscale Investment against the U.S. Securities and Exchange Commission (SEC) regarding Grayscale’s proposal to convert its Bitcoin Trust into a spot Bitcoin exchange-traded fund (ETF).
Will Grayscale Bitcoin Spot ETF Make a Decision This Week?
Bloomberg analyst James Seyffart mentioned the timeline of the Bitcoin spot ETF on Twitter, expressing his opinion on the possible decision date, saying "tomorrow August 15th." The account table specifies August 15 as the ruling date for the lawsuit between Grayscale and the SEC.
For some time, August 15th has been my theoretical Grayscale case decision date, but it was really just an educated guess. I haven’t done a detailed analysis of the court decision like Scott Johnson has. But I have done some, and discussed the timeline with Elliot Z. Stein.
Elliott Z. Stein, a well-known litigation analyst for Bloomberg, responded humorously to Seyffart’s comments:
I hope you are all wrong because I will have no money in my pocket after 10:30 tomorrow morning.
Sefat's delightful response was as follows:
Leave a message now Srinivasan. If it's tomorrow, I'm sure he'll at least wait for you a few days if you ask politely. That's how it works there. Correct.
Scott Johnsson, a finance attorney at Davis Polk, highlighted the fact that “of the 32 cases heard in March 21, 2022, 30 were decided within 160 days of oral argument.” He delved into the matter. The timeline is noteworthy because Grayscale’s oral argument took place 160 days ago in March 2023.
Johnson also stressed the importance of August; this period is typically a clerk transition period, when judges must deal with pending cases "before the new panel is seated."
Additionally, Johnson noted that “almost all cases filed in the D.C. Circuit in March 2022 were resolved within 154 days, with one exception being 170 days.” As of now, 160 days have passed since Grayscale’s case was filed on Tuesday, August 15, and only a handful of March cases are still awaiting a decision.
Key date: Tuesday or Friday?
Eric Balchunas, senior ETF analyst at Bloomberg, also joined the discussion and added another dimension. According to him, the verdict will probably be announced at 11:00 ET, as the court usually announces its verdict around that time.
Most likely, we will know the Grayscale SEC outcome around 11 tomorrow. Only a small percentage of cases take longer to decide. So, the odds are pretty good. Obviously, we may not hear about it. But that would make this case even more unusual.
Balchunas acknowledged Johnson’s legal acumen and mentioned there are two important days this week where grayscale decisions could be made:
Tuesday and Friday, both at 11. Scott, who has more legal wisdom than I do, loves this Friday. (The cases are announced on Tuesdays and Fridays at 11.) In both cases, it’s time to stay awake.
Grayscale’s lawsuit against the SEC stems from the regulator’s rejection of the company’s application to convert its G BTC into a spot Bitcoin ETF in June 2022. Grayscale argued that the SEC acted arbitrarily and did not apply consistent treatment to similar investment vehicles. Industry commentators at Bloomberg are optimistic about Grayscale’s chances of winning the case.
Grayscale recently advocated that the SEC approve all Bitcoin spot ETF applications at the same time, thereby ensuring that no company gains an unfair advantage over others, according to reports. At the time of writing, Bitcoin’s price is $29,300, seemingly unaffected by the speculation.