Is today the day? There are compelling reasons to believe it is, and a federal appeals court will soon issue its eagerly anticipated decision in Grayscale v. SEC, a case that asks whether the Securities and Exchange Commission acted arbitrarily in rejecting a request for a Bitcoin ETF. A lot is on the line for the cryptocurrency market: If Grayscale wins, floodgates to trillions of dollars of newly eligible money will open, and if it loses, prices will drop in response to yet another setback.
Since the District of Columbia Court of Appeals, which heard the case, publishes rulings on Tuesday and Friday, there is good reason to believe that the verdict, which crypto watchers have been waiting for for months, will finally arrive today or at the end of the week. This is most likely the week, however it’s not guaranteed for two reasons. First of all, as counsel Scott Johnson notes, the matter has been ongoing for 160 days, and 94% of the time the court has delivered decisions within 160 days of hearing a case. Second, this is the time of year when the judge’s law clerks, who assist with drafting decisions over the course of a year, depart in order to create room for new clerks.
The lawsuit itself is significant because, according to analysts, the U.S. government’s approval of a Bitcoin ETF will signal to pension funds and other wealthy investors that they can now enter the market and add at least a small amount of Bitcoin to their portfolios. If that occurs, expect Bitcoin’s price to soar well over the $30,000 threshold and ignite a larger surge throughout the industry.
Grayscale must obviously win the case in order for that to happen; otherwise, you can anticipate a sell-off on all cryptocurrency markets. However, after a March hearing in which the court’s three justices forced the SEC lawyer into a corner over how the organization could accept a Bitcoin futures ETF—a riskier and more exotic product—and not a spot market ETF, the chances are in the company’s favor.
While the court’s ruling is likely to cause a quick change in cryptocurrency prices, it is unclear when a Bitcoin ETF would launch. If Grayscale wins, the SEC, whose chairman has waged a fierce political battle against cryptocurrencies, will find a way to sluggishly process the paperwork for prospective ETF issuers. While the crypto business is experiencing challenges in Washington, D.C., if the government prevails, a Grayscale appeal would take months to be resolved. The bottom line is that we are still unsure of what will happen, aside from the fact that this week is probably going to be one of the most important for cryptocurrency in months.
