Tuesday brought a decision felt throughout the cryptocurrency ecosystem. The United States Court of Appeals ruled that Grayscale can convert GBTC into a spot bitcoin exchange traded fund.
The ruling represents a victory over the Securities and Exchange Commission (SEC) and could pave the way for the commission to finally approve spot bitcoin ETFs — an asset that’s long been desired by but unavailable to U.S. market participants.
The ruling sparked a sizable rally not only in bitcoin, but in GBTC and various crypto-adjacent equities and ETFs. For example, the Invesco Alerian Galaxy Crypto Economy ETF (SATO), in which GBTC is the largest holding, surged 12.81% yesterday, confirming the fund’s sensitivity to important crypto headlines.
GBTC the largest of SATO’s 36 holdings. Many of the ETF’s member firms lever themselves positively to a US spot bitcoin ETF. Those include a slew of bitcoin miners and crypto exchange operator Coinbase (NASDAQ: COIN). Coinbase is a top 10 holding in SATO, accounting for 4.81% of the fund’s roster.
Experts Bullish on Ruling
There are still moving parts regarding the fate of spot bitcoin ETFs in the U.S. This includes when the SEC will take up the matter and how many of those products will come to market. Still, experts on constructive on Tuesday’s court decision and its implications for spot bitcoin ETF possibilities.
“It’s excellent that the judge in the Greyscale vs SEC case was able to see the obvious correlation between Bitcoin futures and spot price. Products like Grayscale’s holdings have converted to ETFs in other commodity markets, and it makes no sense to treat crypto differently,” said Greg Moritz, Chief Operating Officer at AltTab Capital, in a statement. “Rules for financial markets need to be based on data, not arbitrary and capricious sentiment toward a legitimate and growing asset class.”