Weekly Recap September 3rd, 2023
Bitcoin Investment Dynamics and Grayscale’s Rising Influence
Bitcoin investment figures reveal complex narratives, especially with the narrowing gap between Grayscale Bitcoin Trust’s (GBTC) price and Bitcoin’s real value. As of August 30, GBTC’s price is discounted by 18.06% compared to Bitcoin, the least since December 2021. Grayscale’s influence is expanding, with holdings over $17.10 billion in Bitcoin.
Grayscale’s momentum surged post its legal victory against the SEC, allowing its potential transition to a spot Bitcoin ETF. Historically, GBTC traded at a discount to Bitcoin’s market value, a trend since early 2021, reaching almost 50% disparity in December 2022. GBTC’s limitations compared to alternatives like ProShares Bitcoin Strategy ETF decreased its popularity.
Grayscale’s Landmark Victory and the Implications for Bitcoin ETFs
Grayscale Investments achieved a significant legal win against the US Securities and Exchange Commission (SEC) when the court of appeals labeled the SEC’s dismissal of the Grayscale Bitcoin Trust (GBTC) application as “arbitrary and capricious.” While this ruling wasn’t entirely unexpected, the SEC’s original refusal stemmed from concerns over potential fraud and manipulation.
Judge Neomi Rao, on August 29, recommended the SEC overturn its rejection of GBTC’s application. However, this doesn’t guarantee a swift approval for Grayscale’s spot Bitcoin ETF. CEO Michael Sonnenshein disclosed they are carefully examining the ruling.
SEC to Respond to Bitcoin ETF Applications Ahead of Labor Day
The U.S. Securities and Exchange Commission (SEC) is poised to deliver decisions on multiple significant Bitcoin ETF submissions. Financial giants such as BlackRock, VanEck, and Invesco are among those awaiting responses.
The regulatory body may disclose its position for Bitwise as early as this Friday, with declarations for other applicants anticipated the following day. All possibilities – approvals, denials, or further deferrals – remain open.
A Look at SEC’s Previous Rulings Historically, the SEC has often opted to prolong decisions related to Bitcoin ETF submissions. Just a month ago, the commission delayed its verdict on the 21Shares’ spot-Bitcoin submission in partnership with ARK Investment Management.
Last year, Grayscale Investments faced a hurdle when the SEC declined its bid to transform its Bitcoin trust into an ETF, pointing to possible market manipulations and fraud as the rationale behind the decision.
JPMorgan Anticipates Brighter Days Ahead for Bitcoin
The Bitcoin market’s volatility has been as unpredictable as British weather, right? However, experts at JPMorgan Chase & Co. suggest calmer times might be on the horizon. Brace your digital assets.
Remember the surge of excitement, reminiscent of the Guy Fawkes Night fireworks, when there was a regulatory tilt in favor of the crypto sector, especially with Ripple’s partial legal win? That event momentarily propelled Bitcoin prices.
Yet, similar to fleeting fireworks, the enthusiasm seems to be ebbing, dragging a substantial part of the market value with it. Many attribute this decline to the diminishing effects of those optimistic legal outcomes.
